London 10 Dec (ANA) - British stock markets are on track to be the worst performer in the developed world this year, as analysts warn that record-breaking levels in the US could crash in 2018. After a bumper 2016 when the UK’s biggest 100 stocks climbed 14pc in value, the FTSE 100 has eked out a measly 3.5pc gain in 2017 while the Dow Jones in New York and DAX in Frankfurt soared 23pc and 15pc respectively in a global bull market. Mike Bell, global market strategist at JPMorgan Asset Management, said uncertainty over the Brexit negotiations led investors to cut back on UK stocks, while the pound’s modest gains have hit overseas earnings. Meanwhile, the US market could be in for a shock. Sustained support from the US Federal Reserve has pushed up shares in recent years. But the Fed is hiking interest rates and cutting government bond holdings. “A big amount of debt has been taken out of the system due to QE but one thing we pretty much know for certain is this will change,” said Anton Eser, Legal & General Investment Management’s chief investment officer. As US and European governments keep borrowing but QE slows down, a net removal of $300bn (£224bn) of bonds from the market in 2017 to a gain of $500bn in 2018 is expected. There is potential for a 20pc to 30pc fall in stocks, Eser fears. A fall of this size could tip the economy into recession, he warns.(ANA)

FA/ANA/10 December 2017-----