Wealth management may suffer from forecast downgrade


Corporate and private wealth management could be affected if an announcement by the new fiscal watchdog points to weaker growth than predicted by the Labour government.

Private banks and corporate investors may have expected little change in the three per cent expansion rate projected by former chancellor Alistair Darling.

However, many observers now believe the Office for Budget Responsibility will downgrade the previous estimate in favour of a more cautious offering.

The announcements will shape the emergency Budget, due on June 22, followed by a spending review in autumn.

Some commentators have accused the new coalition of putting a negative spin on figures in order to undermine the previous government and build support for wider public services cuts.

Revised data shows government borrowing in 2009/10 was lower than expected, though still at record levels.

Opinion remains divided on the timescale of planned cuts in government spending. Some experts argue the deficit should be reduced as soon as possible, while others fear cutting back fiscal support measures too soon may lead to a double-dip recession.ADNFCR-2318-ID-19834077-ADNFCR