US risk to UK growth next year, says L&G

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UK economic fundamentals look good for next year, but there is a downside risk that could be sparked by US consumption falling if the housing market there slows, analysis by L&G suggests.

Looking ahead to possible economic trends through 2006, the insurer says the UK experience through the past year has show how consumer confidence can be knocked by a stuttering housing market, with all the subsequent fallout implied. For example, UK GDP growth rates are at their lowest level since 1992. That said, the company’s current outlook is relatively benign: UK interest rates are expected to remain in a band between 4.25% - 4.5%, while the FTSE 100 index is expected to trade between 5,500 - 5,800 points. The downside risk comes because of recent interest rate moves in the US. A...

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