L&G warns of austerity


Legal & General has sounded the warning bell for the UK economy – claiming that a "triangle of austerity" will hit growth next year.

The company, which controls £391bn of investor assets, said output was likely to be below the official 2 per cent forecast in 2013 as the Government, regulators and banks held back from boosting the economy.

Nigel Wilson, the chief executive, said policymakers should turn to the private sector for growth. He warned that companies continued to sit on large cash reserves because of economic uncertainty. The warning came as L&G posted record third-quarter figures, with sales up 28 per cent at £533m in the three months ending 30 September. Sales of individual annuities rose 10 per cent to £350m and its UK protection business rose 30 per cent to £56m.

"The hidden hand of the market is being hidden at the moment," Mr Wilson said. "Regulators need to create an environment where companies play a bigger role in UK plc."

Mr Wilson said L&G remained on the lookout for acquisitions, particularly in the UK where it hopes to build its market share in the fund management, general insurance and mortgage markets.

"We've had a huge amount of interest from bankers bearing gifts, there's a lot for sale but we will be careful in what we buy."