Double-dip recession predictions may be overblown as fund managers increase share holdings and cut back on bonds

Chances of a double-dip recession may have been overblown if the actions of leading fund managers are to be believed. Managers are hoping for a sustained economic recovery and have increased their share holdings and cut back on bonds illustrating their confidence in the market. A Reuters poll of 11 British institutions found that the average allocation to equities rose from 46.4 per cent in July to 49.8 per cent in August and bonds fell from 25.5 per cent to 24.2 per cent. The UK is one of the few countries to see an increase - US and European investors reduced their equities.

Interest rate could rise to 8 per cent by 2012 according to economic expert

Interest rates could rise to 8 per cent in 2012 to combat a surge in inflation, according to the chief economist at the Policy Exchange. Andrew Lilico warned that the UK could face a double dip recession followed by a massive boom, which will need to be restrained with a higher interest rate to prevent falling back into another recession.