Cowley to remove all gilt and sterling exposure if drastic deficit cuts are not introduced

Old Mutual Asset Managers' Stewart Cowley plans to remove all gilt and sterling exposure from his global portfolios unless tough austerity measures are made following the general election.

While Labour plans roughly to halve the £163bn deficit over four years, Cowley says gradual reductions will not appease the markets. “Whoever inhabits 11 Downing Street by mid-May is going to have to deliver some harsh medicine,” he says. “Like Greece and Ireland, we should go in hard and decisively. “Not even Keynes imagined you could, or should, run a 12% of GDP deficit when he advocated intervention from time to time to prop up economies.” If harsh cuts are not forthcoming, Cowley will offload his sterling and bond exposure in his global funds. The manager’s £145m Global S...