Governments ‘should focus on growth’
UK Select Equity fund manager buys up defensive stocks but remains positive on outlook for 2012.
Old Mutual Asset Managers’ (Omam) Simon Murphy has added his voice to calls for European governments to focus more on stimulating growth.
Mr Murphy, manager of the £79.6m Old Mutual UK Select Equity fund, said the overwhelming focus on ‘austerity’ measures of cutting spending and raising taxes, to bring spiralling deficits under control, should now be accompanied by more pro-growth policies.
The remarks come after an election in France saw an electorate vote in favour of growth over austerity in a recent presidential election, and as the first round of Greek elections saw austerity candidates rejected.
But the UK’s coalition government led by David Cameron has continued to focus on a strict policy of austerity even as the UK has tumbled back into a technical recession.
Mr Murphy said: “In Europe we have been on just this ‘austerity, austerity, austerity’ drive and we are starting to see a backlash from voters in various countries. Is it a healthy thing? I suspect it is, because I think there is a recognition that it can’t just be about austerity in terms of solving these deep seated problems in Europe.
“One of the key issues is that we need to start seeing a way to grow our way out, and so to the extent that we get to a more balanced approach, one that still focuses on austerity but tries to come up with some growth initiatives as well, that must be good news.”
Mr Murphy has been adding to defensive holdings but is maintaining a positive outlook on the UK stockmarket, in spite of turmoil in Europe.