With fears of a double dip and a potential downgrading of the UK, it is of no wonder why investors are sceptical about investing into the markets……. But will these two scenarios actually happen?

The Centre of Economics & Business Research (CEBR) expects the US economy to continue growing next year but at a slower rate.

This means that they predict no global double dip recession, just a lower global growth rate than previously expected; the CEBR have reduced the initial forecast of 3.7% down to 3.5%. In addition to this they predict their forecast of 2011 to go from 4.1% to 3.4%

In conjunction to this the Organisation for Economic Co-operation and Development (OECD) cut their US growth forecast from 3.2% to 2.6%.

On the positive side, US manufacturers are increasing their output and the CEBR does not expect destocking to last long. It believes corporate spending in the US will eventually boost growth, but this may not happen until 2012.

"I would be prepared to bet one of my better shirts on there being no global double dip", said CEBR chief executive Douglas McWilliams.

"Although their growth will be affected by slower growth in the West, the emerging economies are too resilient for global growth to go negative again in the short term."

On a negative note, the CEBR warned that the failure of the wheat harvest in Eastern Europe, caused by drought and wildfires, meant that consumers worldwide would face higher food prices and therefore have less money available for spending on other goods and services.

In addition to this it is hard to predict how much the economic climate has affected the unemployment rate in the long term!

What about the UK?

Moody’s have finally given the UK some good news with regards to their AAA credit rating; they have said that the UK government’s austerity measures have strengthened their rating and made their AAA status safe.

The agency said the outlook for the UK's public finances remained stable, despite slower growth.

"The global financial crisis of 2008-09 caused serious long-term damage to the British government's balance sheet", said Moody's analyst Kenneth Orchard.

But he also said that the UK has "the wherewithal and ability to meet these challenges".

Moody’s said that they are happy with the UK’s AAA rating because the government’s commitment to stabilize and reverse the determination in its financial strength is apparent and they believe they will follow through with what they say.

The agency added, "The UK economy appears sufficiently flexible and robust to grow moderately, even in the face of.. austere fiscal consolidation".

It was 1978 when the UK were graded AAA and it seems that this rating will be around for some time to come.