SIR Angus Grossart, the influential merchant banker, has expressed caution about the outlook for the UK economy saying the recovery is over-reliant on consumer spending and low interest rates.

He has also highlighted the fact he believes there are many major international and political uncertainties that are unresolved and which cast a cloud over the economic landscape.

However, Sir Angus has said the Noble Grossart merchant banking business which he chairs is well placed to adapt to a period which will see much change and uncertainty but also opportunity.

In his chairman's report in the accounts for Noble Grossart Holdings for the year to 31 January, Sir Angus wrote: "There was a cautious and slow recovery in financial market conditions and in economies but that has not diminished the many reasons for caution. Financial expectations are unduly high and value is elusive."

He added: "The absence of real economic growth, marked by low interest rates and consumer spending, which can create a benign impression is not a reliable foundation for the future."

Sir Angus suggested the evolution of information technology and the associated increase in the amount of information available for analysis may have led to the erosion of judgemental decision taking.

He observed: "Despite all the available information most experts failed to anticipate the halving of the oil price."

Noting that Noble Grossart Holdings' balance sheet strengthened during the year to January, Sir Angus said the business will continue with a conservative and long term strategic approach that has stood the test of time. The company should be able to adapt flexibly and decisively to future developments.

Sir Angus said Noble Grossart had had a satisfactory trading year, with a pre-tax profit of £15.6m which left it in very strong condition.

The group made £29.9m pre-tax profit in the preceding year.

The total gains on investments fell to £7.4m from £23.8m. Fees and commissions receivable totalled £1.6m in line with the previous period.

The remuneration of the highest paid director was £593,000, compared with £580,000 in the preceding year.