Confidence in the UK economy amongst advisers has fallen by 5% this quarter, Skandia says.
Advisers rate their confidence in the economy as 5.1 out of 10 (with 10 as the maximum), compared to 5.6 in Q2, according to the Skandia Adviser Confidence Barometer.
The FTSE 100 will end the year at 5,578, 11% down from last quarter's prediction of 6,290, the research says.
Advisers see European debt as the greatest threat to the economy, and US debt and government spending cuts also feared.
On inflation, 37.2% of advisers think it will decrease and 32% think it will decrease.
More than half of advisers think interest rates will stay at 0.5%, whereas in Q2, just 14% thought so, with 84% believing they would rise.
Advisers see emerging markets as having the best potential for returns over the next year, and saw the global specialist sector and UK equities as the second and third best opportunities.
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