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Pimco predicts low growth rates for Britain and the Eurozone

Bond giant predicts slow European growth

The UK will not reach it's deficit reduction targets between 2012 and 2015, due to high unemployment levels and limited growth, says bond giant Pimco.

Pimco's head of sterling portfolios, Mike Amey. Amey believes that Chancellor George Osborne will have to revise his austerity measures, although he does not believe that the government will turn their back on the plans entirely.

As reported by the Telegraph, Amey explained:

"We don't believe that UK real GDP is going to average 2.75 per cent in 2012 to 2015. We think if things work out reasonably well it will be more like two per cent, which is going to make it quite hard to get the unemployment rate down."

On a positive note, however Amey said that the Bank of England has maintained its credibility despite high inflation levels.

Speaking on the situation of Greece and the Eurozone, Amey said that he believed that Greece would stay in the European Union, but would probably have to leave the Euro zone for a certain period of time. Amey also noted that in the light of the current crisis, the Europe would probably experience low growth rates for the years to come, yet that a break up of the Eurozone would have catastrophic effects on the global financial system.