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Uncertainty around growth prospects for 2010

Barclays Wealth's senior euro-area economist Sandra Horsfield visited the Isle of Man recently to address invited guests at a series of seminars and events.

The seminars were based around the company's quarterly Signpost publication, which analyses the global economic climate.

Ms Horsfield's comments under the heading Market Overview included: "Looking back over the last, or perhaps more appropriately, lost decade in hindsight, investors in risky assets were not well rewarded.

"The best returns were achieved in gilts, with equities and real estate performing worse than cash. HIstorically this is unusual: between 1900 and 2008 annual inflation-adjusted returns were highest on stocks at 4.9%, with those on gilts and cash much lower, at 1.2% and 1.0% respectively."

She continued: "There is general agreement that the economic outlook is now brighter, with short-term growth momentum building a 'V-shaped' recovery in growth rates.

"Two reasons for this growth are the inventory cycle and trade rebound. By July, world trade had recovered a fifth of its peak-to-trough fall, and Asian exports recovered over a third of their fall.

"However, there is still understandable uncertainty about growth prospects for 2010 for three reasons: rebalancing growth away from Anglo-Saxon consumers is a big ask; consumers stand to suffer from weaker wage growth and higher inflation; and it is highly likely that policy, both monetary and fiscal, will be tightened.

"Unfortunately, the UK may well face a rockier road than most, with headwinds from high public and private-sector indebtedness and potentially abrupt fiscal tightening, starting soon after the spring elections."

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