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Neuberger Berman upbeat on Europe
19 July 2013
Tips return to growth in Q4 2013
Neuberger Berman’s Asset Allocation Committee has upgraded its view on Europe, citing returning growth in the UK and core Eurozone and slow improvements across peripheral countries.
The investment firm argued that despite the ongoing effects that austerity, high costs of borrowing and a generally downbeat economic sentiment have had on growth, combined with the depression-like conditions across much of southern Europe, pockets of growth were visible.
It noted that the UK was experiencing a broad recovery in GDP growth, improving consumer sentiment and housing data on he back of the Bank of England's easy monetary conditions, while Germany and countries within the Eurozone and Nordics had also returned to growth.
But it warned that austerity cuts and other regulatory reforms had not yet entirely fed through into increased competitiveness and controllable deficits, leading to “near constant political turmoil in affected countries”.
Despite this, it said there were “subtle signs” of improvement in economic rebalancing, productivity and labour market conditions in some peripheral Eurozone countries.
The asset manager said it believed “the worst of the debt crisis is over” and Europe could return to growth in the fourth quarter of 2013, led by Germany.