The investment management team at Legal and General are anticipating recession in the UK as early as this year.
The economic indicators the Legal and General people are looking at are highlighting an imminent recession. These indicators include the level of borrowing, reduced spending and the relative inability to access extra funds. In combination these factors are really making the British public take notice of the economy and consider their own positions.
Further driving the problem is the fact that the global economy is struggling, so it is not an isolated UK issue. Consumers in the UK are keeping a wary eye on the situation says Legal and General, which automatically means they are less free with their spending and tend to be much more conservative in their decisions.
Although the general feeling may be that UK banks are currently taking a beating an investment expert has suggested Lloyds TSB makes a great investment opportunity right now.
The analyst felt that in the midst of what have been torrid trading conditions Lloyds TSB had announced very encouraging results. The bank has taken a cautious stance on mortgages, buy to let ones especially, and also any securities that are underwritten by assets.
This approach has kept Lloyds TSB away from the worst of the difficulties facing some other banks and left them looking strong as they move forwards. The bank appears to be a relatively safe haven with the cautious management approach but also offers the opportunity for substantial growth as Lloyds TSB uses its relative strength to maximise market opportunities.
Barclays Bank recently announced they were considering a sale of shares to avoid a rights issue and this has led to interest from Temasek Holdings in Singapore and QIA, the Qatar Investment Authority.
The bank is looking to raise over GBP4 billion to fund the different areas of business, such as Barclays Insurance, as well as the high street banking operation. The QIA, which holds a stake of over 15 percent in the London Stock Exchange, expressed an interest in European banks as early as January this year, so they are seen to be a very interested party already.
Temasek Holdings also have a 2 percent stake in Barclays Bank already and will be very interested to see how the numbers add up for this latest opportunity. There has been talk of valuations needing to be reassessed although nothing firm has come from this to date. Perhaps as buyers get nearer to committing Barclays will need to ensure everything is in place to make the sales process a smooth one.
