"I think the thing that would make us sell, post-election, is the potential for interest rate rises, whoever wins the election. The economy is growing at quite a fast rate at this stage of the cycle." He said he would expect any new government to attempt to slow economic growth by raising the cost of money.
That could hit L&G's successful index-tracking fund operation. The group revealed yesterday that it nearly doubled the amount of new UK funds under management to pounds 4.25bn last year, helping raise worldwide assets by a fifth to pounds 48.1bn by the end of 1996. Mr Prosser attributed the growth to the success of the group's "safe and cost-effective" indexed fund, which he claimed was now the largest such pooled vehicle on the market.
He was speaking as the group announced a 15 per cent rise in operating profits to pounds 291m. The dividend rises 14 per cent to 11.13p, after a final of 7.63p.
The main life and pensions business saw premium income soar 54 per cent to pounds 301m, including a quadrupling of new single-premium pensions business, leaving profits 14 per cent ahead at pounds 207m. Mr Prosser ruled out acquisitions to grow the business, but welcomed the initiative by Peter Lilley, the Social Services Secretary, in effect to privatise state pension provision.Reuse content