sovereign-international Uk Spending Cuts Threaten New Recession...

Sovereign-International apparently believes that Britains economic recovery is so

weak that the austerity measures planned by its new coalition government could tip the country back into recession.

According to Sovereign-International analysts, with little or no investment or hiring coming from the countrys private sector and an imminent raft of deep cuts in the public sector, it remains to be seen where growth in the economy will come from.

The analysts said that Britains emergence from its deepest recession on record was among the weakest of the G7 nations and they warned that the government could be trying to cut its budget deficit too quickly before the economic recovery could establish a solid and sustainable footing.

Many of Britains neighbors in the European Union have already announced austerity measures aimed at reining in the unprecedented debt chalked up in their efforts to combat the global recession. These measures, said one of the Sovereign-International analysts, flew in the face of sentiment that prevailed as little as 6 months ago when many of them were calling for resolute commitment to spending their way out of anemic growth.

The Greek debt crisis has galvanized attention on the fact that governments simply cannot continue to borrow money to finance spending and, that any attempt to do so would ultimately result in debt servicing burdens that could not be sustained.

Sovereign-International told clients to avoid acquiring stocks in UK companies and, instead, to focus on more defensive plays in its buy list.

by: Amanda Sedgewick

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