The investment bank's latest survey of fund managers across the world revealed a mood of uncertainty with cash holdings still relatively high as rising numbers expect the Federal Reserve to start pulling back on its stimulus programme by early next year.
John Bilton, European investment strategist at BofA Merrill Lynch Global Research, said: "The UK is kind of offshore Europe and offshore US."
The bank tips the UK for growth of 2.6% next year, slightly ahead of the Office for Budget Responsibility's 2.4%.
It also expects the UK stock market to do well thanks to the large presence of energy and pharmaceuticals companies that it believes will be in favour and the large number of companies with exposure to buoyant emerging markets.
The bank has a target of 7400 points for the FTSE-100, compared to last night's close of XXXX.
Mr Bilton said: "We think the FTSE will do well next year."
He added: "We think the FTSE will perform better in the first half of next year rather than the second half."
He said that the UK has undertaken reform in areas such as banking, ahead of those in the eurozone.
"The UK banks are arguably further along than the European banks," he said.
But he cautioned that the UK will still be affected by events in the eurozone.
"The truth is we are still geopgraphically part of Europe and rely on it for more than 50% of exports."
Fund managers increasingly expect an early start to the tapering of the Federal Reserve's stimulus programme with 11% anticipating it beginning this month and 32% in January. Some 42% tip it to start in March. Despite this, a net 71% of fund managers expect a stronger global economy in the next year.
They increasingly want companies to invest their cash holdings to benefit from the economic upswing. Record numbers believe companies are underinvesting.
"The calls for firms to spend their cash on cap ex is the highest we have seen since December 2005," Mr Bilton said.
"The interesting thing is that investors have high cash themselves."
Fund managers reported holding 4.5% of their portfolios in cash.