Strategist forecasts 10 years until euro unites all

Deputy Business Editor

Friday 22 June 2012

AN equity strategist is warning it could take another 10 years before the problems in the eurozone are resolved.

Custom byline text:

GREIG CAMERON

Will Hobbs, from Barclays Wealth, was in Glasgow this week speaking to members of the Scottish Council for Development and Industry.

While Mr Hobbs is confident global gross domestic product (GDP) will show growth of between 3% and 4% this year, he admits there is no quick fix for the troubles in Europe.

He said: "Things are not quite as grim as some would have us believe, although there are certainly threats."The eurozone is almost changing on an hour-by-hour basis but the weight of history and the lack of credible alternatives are likely to push politicians towards fiscal consolidation."There is a question over when European integration will actually happen. There will be signposts along the way, such as co-ordinated bank supervision and deposit insurance. "We see it taking at least a decade to work all of this out. The interesting thing is that with Spanish yields where they are, policy makers are being forced into making decisions a bit earlier. That may push the timetable a bit earlier but it is still going to take a long time to sort out the eurozone. "It is the most ambitious fiscal, political and economic construct ever attempted, so there is plenty of work to do."The continuing support of the European Central Bank is crucial to resolving the problems in the eurozone, according to Mr Hobbs.He said: "It has provided the insurance policy so far and hopefully that will continue."Outside of Europe, China is expected to hit GDP growth of about 8% this year, while other emerging economies, such as Russia, Brazil and India, are also expected to continue growing.While Asia is seen as an attractive area to invest in, Mr Hobbs is aware the United States remains the driver of the global economy. He said: "The US economy is still the most important factor in the world's health and within that the US consumer, which makes up two thirds of the economy, is something we watch very carefully. "So far US consumer spending seems to be on an upward trajectory so we are optimistic."

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

Strategist forecasts 10 years until euro unites all

Commenting & Moderation

MOST READ

SPONSORED LINKS

MOST COMMENTED