MercoPress. South Atlantic News Agency

Apocalyptic forecast about G-7 countries from investment advisor

Pimco’s Bill Gross recommends Asia; UK assets are a “must to avoid”

A top investment advisor has described Britain's economy as a 'must to avoid' and says 'gilts are resting on a bed of nitro-glycerine'. Bill Gross, manager of the world's biggest bond fund Pacific Investment Management Co made the comments as he warned investors to shy away from government debt, especially in the G7 industrialised nations.

Mr Gross, in his February investment outlook posted on the website of Pimco, recommended shifting assets to Asia and developing countries.

The G7 industrialized nations have 'lost their position as drivers of the global economy' and will likely reel for years from the effects of increasing debt, Gross said.

Britain is a 'must to avoid' because of its high debt, which could devalue the pound and he said: “Gilts are resting on a bed of nitro-glycerine.”

But UK Treasury Minister Stephen Timms hit back at the claims, blasting them as untrue. He said: “That company has made rather similar comments in the past. It is entirely untrue.

”We have continued to see a good level of demand for gilts. I only point to the fact that our auctions have been well covered and I am confident that we will continue to meet our needs.”

Mr Gross said the most vulnerable countries are those whose public debt may exceed 90% of GDP within a few years, which could slow GDP by 1% or more. Other countries where rising government debt threatens to slow growth - depicted by Gross within a 'ring of fire' - are Ireland, Spain, France, the United States, Italy, Greece and Japan.