The majority of Schroders’ intermediate clients believe there is less than a 30 per cent chance of a double dip recession in Europe, according to a survey.

Polling 100 intermediary clients – such as independent financial advisers – from Europe, the Middle East and South America, who attended a recent investment conference, Schroders’ said 90 per cent felt there was less than 30 per cent chance that the European economy would return to negative growth.

Schroders’ said the view of the majority surveyed was supportive of the firm’s economists who believe increased corporate profitability will feed through into capital expenditure and higher employment.

It is believed this will offset the effects of public spending cuts and the process of households reducing their debts.

Of the respondents, 47 per cent anticipated higher inflation in one year, rather than deflation, while 82 per cent predict higher inflation over the next three years in countries using the Euro.

Schroders believes that while inflation may fall in the short term, global tax, public spending and economic stimulus measures could have an inflationary effect in the longer term.

Chief economist at Schroders, Keith Wade said: “Although we do not believe that a double dip is on the cards and despite seemingly ample capacity for the global economy to grow, we continue to forecast a slow and volatile recovery for the next few years due to the lack of growth demand and structural unemployment concerns.”

David Scammell, head of UK and European Interest Rate Strategies said the company was seeing increasing interest in its inflation linked products which could offer some protection to investors in the current environment.

© Fair Investment Company Ltd