Confidence in the world’s economic outlook has rebounded from three-year lows fuelling expectations that the US Federal Reserve will raise interest rates rise next month, according to a closely-followed monthly survey of investors around the world.
The proportion of portfolio managers who said they expected the Fed to hike interest rates in December has jumped to 81pc from 47pc in October, Bank of America Merrill Lynch found, after polling 201 investors managing $576bn in assets earlier this month.
Worries about a slowdown in China abated somewhat with economic growth expectations for the world’s second largest economy touching 15-month highs. Just 4pc of investors surveyed now anticipate a weaker economy in the next 12 months, compared with 22pc in October.
The outlook for Europe is also positive, BoA said. Growth prospects in the region jumped by the most in 10 months, after 54pc of those polled said they expect the European economy to strengthen – up from 25pc last month.
Investors cited renewed economic stimulus in the form of quantitative easing and low interest rates as the most important sources of growth in the eurozone.