Hargreaves: UK economy to shrink for 18 months
The recession in the UK could last up to 18 months, chief executive of Bristol-based fund manager Hargreaves Lansdown warned yesterday.
Peter Hargreaves, the cofounder of the firm, said that he expects the FTSE 100 index to fall below the 5,000 mark and that there could be up to six quarters of negative growth, worse than many experts have forecast. Two quarters of consecutive negative growth are considered a technical recession.
Commenting on the results for the financial year ended on 30 June, he said: “The outlook for markets remains gloomy and people are unlikely to invest when they believe stocks will decline in value. The events that unfurled during the last 18 months gave all citizens a reminder about the ills of profligacy.”
However, the company’s results were positive, with a nine per cent increase in assets and pre-tax profits rising from £24.2m to £60.9m. Hargreaves said this was “nothing less than remarkable” in light of the current poor market conditions.
The group has promised a special dividend of 2.3p to shareholders, alongside a first regular final dividend of 2.4p, payable to shareholders on 30 September. This, added to the interim dividend of 3.1p, brings the total dividends to 7.8p.
Hargreaves said: “These may be the most difficult times faced in recent history. But the quality of our offering, the high calibre of our staff and our underlying income base afford us the potential to emerge with significantly higher market share.”
Hargreaves shares closed 6.75p higher yesterday at 167.5p.
