Private wealth management rising as spending falls?

Private wealth management through investment or stock market speculation may be on the rise, as research shows public spending remains depressed.

A report from the National Institute of Economic and Social Research (NIESR) describes the low public expenditure as a "drag" on the economy, saying net trade will provide the boost required for economic expansion.

Individuals may be placing private wealth in offshore bank accounts or hedge funds, as the recession heightened awareness of the need for financial planning to provide for future eventualities.

The organisation suggested the saving rate will remain above six per cent, while per capita consumer spending may not recover to pre-crisis levels until 2015.

It also predicted gross domestic product will grow by 1.3 per cent this year, then by 1.7 per cent and 2.2 per cent in 2011 and 2012 respectively.

Established in 1938, NIESR is an independent research body, examining economic issues such as modelling and macro analysis, employment and international financial trends.ADNFCR-2318-ID-19910609-ADNFCR