Aberdeen Asset Management pulls no punches in its November update on its outlook for the wider econom...
The bottom line according to Aberdeen is that the US is in recession and any recovery is unlikely to start until midway through next year.
The effects of the current downturn will last much longer, however, as price deflation will likely keep profit levels down throughout 2002, even beyond the beginnings of an upturn.
That will co-incide with a global GDP growth rate that will remain at its most subdued since the 1930s over the next 2-3 years.
Interest rates will continue to fall towards the 0% real level used during the last recession, which in the case of the US would imply the Federal Reserve Bank cuts rates to 1.5%, as predicted 2002 inflation will drop to that level there.
UK GDP next year is forecast at 1.7% by Aberdeen, well below this year's 2.2% target.
This will be felt particularly in the housing and stock markets it says.
Aberdeen predictes the rate trough in the UK will hit 3.75% by next year.
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