Newcastle investors hopeful on UK economy as General Election approaches

Head of Newcastle office Aidan Dunstan warns that confidence could be dampened by 'uncertainty' in case of coalition government

Journal Independence Breakfast Debate at the HiltonJournal Independence Breakfast Debate at the Hilton. Bill O'Neill of UBS

Two thirds of investors (65%) in Newcastle and the surrounding areas are optimistic about the UK’s economy as the General Election approaches, according to a survey conducted by UBS Wealth Management.

Coming after George Osborne’s 2015 budget, the sentiment chimes with predictions the economy will continue to grow above European rivals at a rate of between 2.3 and 2.5%.

Aidan Dunstan, regional head of UBS Wealth Management in Newcastle, said: “There is a sense of positivity about the economy in the region.

“Our clients are investing in their businesses and looking to take on more staff.

“This confidence has been steadily growing over the past couple of years.

“This sentiment might be dampened as we come up to the General Election. If a coalition government is the outcome there will be plenty of uncertainty, which can knock investors’ confidence.”

The survey was conducted at a recent UBS Investors Forum, attended predominately by investors from Newcastle, with several travelling from elsewhere in the region.

Those in attendance were also bullish about the US economy, with eight in ten (81%) saying that they believed it would continue to grow above 3%. By comparison, UBS itself is predicting a rate of 2.8% growth in the country this year.

The majority of investors (56%), however, did not expect to see any movement in interest rates until 2016.

Bill O’Neill, Head of Investment Office at UBS, said: “We are very optimistic about the UK economy and confident that economic growth will be felt beyond the South.

“The UK will remain among the best performing G7 economies this year as we see business and consumer confidence increase and real incomes grow.

“This pace of expansion should continue to drive unemployment rates down and push wages up.

“It is unlikely that this will be enough to convince the Bank of England to hike interest rates before the final quarter of this year, however.

“Although investors may be confident in the economy at this stage in the election campaign, any uncertain outcome is likely to cloud this. The markets may be unconcerned now, but as the election date approaches volatility will inevitably rise.”

UBS is one of the world’s leading financial firms, employing more than 850 people across a network of seven offices in the UK and Jersey.

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