• Privacy policy
  • T&C’s
  • About Us
    • FAQ
    • Meet the Team
  • Contact us
TLE ONLINE SHOP!
  • TLE
  • News
  • Politics
  • Business
  • Sport
  • Opinion
  • Elevenses
  • Entertainment
    • All Entertainment
    • Film
    • Lifestyle
      • Horoscopes
    • Lottery Results
      • Lotto
      • Thunderball
      • Set For Life
      • EuroMillions
  • Food
    • All Food
    • Recipes
  • Property
  • Travel
  • Tech/Auto
No Result
View All Result
The London Economic
SUPPORT THE LONDON ECONOMIC
NEWSLETTER
  • TLE
  • News
  • Politics
  • Business
  • Sport
  • Opinion
  • Elevenses
  • Entertainment
    • All Entertainment
    • Film
    • Lifestyle
      • Horoscopes
    • Lottery Results
      • Lotto
      • Thunderball
      • Set For Life
      • EuroMillions
  • Food
    • All Food
    • Recipes
  • Property
  • Travel
  • Tech/Auto
No Result
View All Result
The London Economic
No Result
View All Result
Home News

Recession fears raised as economic indicators flash red

The warning signs have spooked the markets

Joe Mellor by Joe Mellor
2019-08-15 16:18
in News
credit;PA

credit;PA

FacebookTwitterLinkedinEmailWhatsapp

Fears were raised on Thursday that the UK and countries around the world could be heading for a recession.

An inverted yield curve – where short term Government bonds become less attractive than long term ones – in the UK and US has particularly spooked markets.

A similar move happened in the build up to the 2008 recession.

James Knightly, chief international economist at ING, explained the significance.

He said: “In normal times investors want to be compensated for the risk of lending for longer periods of time – you do not know what may happen over the next 10 years (will inflation spike, will a country get into debt problems etc) – and they feel more comfortable lending over a shorter period of time.

“Hence why interest rates on two-year debt are normally lower than 10-year borrowing costs.

“However, the fact that this has flipped suggests that investors are seriously worried about a downturn, which will keep inflation low.”

RelatedPosts

Brexit: Financial ‘competitiveness’ could spark race to bottom and dump costs on taxpayers

Rachel Riley says Jeremy Corbyn is to blame for trans rights ‘attacks’ on JK Rowling

‘Putin now KNOWS he is losing the war’ – Ex-Russian PM drops bombshell

Piers Morgan dubs Eurovision contest a ‘rigged farce’ following Ukraine win

Some analysts were concerned about the shift, especially alongside the other global problems.

Michael Hewson, chief market analyst at CMC Markets UK, explained: “We’ve heard a great deal in the past few days over yield curve inversions and how they are often harbingers of upcoming recessions.

“It is certainly true that they have been good leading indicators of impending economic slowdown in the past, however they have also given off false signals as well.

“Throw in concerns about US, China trade, slowing growth, the risk of recession in Europe, particularly Germany, Brexit, the possibility of Italian elections, unrest in Hong Kong, as well as a crisis in Argentina, and tensions in the Arabian Gulf and its perhaps not surprising that investors are moving into areas which generate a positive rate of return.”

Experts warned that a recession could lead to company collapses and business struggles.

Dr Kerstin Braun, president of finance firm Stenn Group, said: “This is different to the last financial crisis.

“Companies were already struggling, the economy was starting to linger, and this time it’s not a consequence of a financial bubble. Instead it’s been caused by governments. Monetary policy is also no longer an effective solution.”

Mark Carney, Governor of the Bank of England, has previously said the UK has a one-in-three chance of heading for a recession, and several economic indicators have been in decline.

However, the UK could avoid a recession thanks to Brexit. In the build up to the last Brexit deadline of March 31, businesses started spending more to stockpile products and materials.

It led to a boost in business and helped the economy grow in the first quarter of the year – with GDP between January and March up 0.5%, compared with growth of 0.2% in the final quarter of 2018.

But, in the three months to the end of June GDP fell 0.2%. Two quarters of falls in a row is how a recession is technically described.

The UK managed to avoid a recession in 2012 thanks, in part, to the Olympic Games in London, which helped boost the economy, as the eurozone crisis led to European countries to suffer from a slowdown.

Conservatives have abandoned economic responsibility and voters are starting to notice – click here

Since you are here

Since you are here, we wanted to ask for your help.

Journalism in Britain is under threat. The government is becoming increasingly authoritarian and our media is run by a handful of billionaires, most of whom reside overseas and all of them have strong political allegiances and financial motivations.

Our mission is to hold the powerful to account. It is vital that free media is allowed to exist to expose hypocrisy, corruption, wrongdoing and abuse of power. But we can't do it without you.

If you can afford to contribute a small donation to the site it will help us to continue our work in the best interests of the public. We only ask you to donate what you can afford, with an option to cancel your subscription at any point.

To donate or subscribe to The London Economic, click here.

The TLE shop is also now open, with all profits going to supporting our work.

The shop can be found here.

You can also SUBSCRIBE TO OUR NEWSLETTER .

Subscribe to our Newsletter

View our  Privacy Policy and Terms & Conditions

Trending on TLE

  • All
  • trending
Abdollah

‘Rescue us’: Afghan teacher begs UK to help him escape Taliban

CHOMSKY: “If Corbyn had been elected, Britain would be pursuing a much more sane course”

What If We Got Rid Of Prisons?

More from TLE

JET B-LAG – A British model has travelled 10,000 miles across the globe to Australia for FREE – blagging rides on planes, tractors, cars, ferries, buses, bikes and tuk tuks

How to get cheaper train tickets despite the rail fares increase

Police release defiant mugshots of the Britain First leaders early because of impact they have had on the community

Revoke Article 50 petition soars past 500,000 signatures

UK is becoming 51st state of the US under Tories, MP claims

Richard Littlejohn column goes viral following ‘Sixth Sense’ twist

Viral reactions as there is now a dating platform for anti-vaxxers

Chelsea’s fringe players to be given a clean slate by new boss Lampard

Cristiano Ronaldo: Banner flies over ground referring to allegations of rape made against star

The great COVID robbery: Multimillion-pound companies take bailout money and lay off their staff

About Us

TheLondonEconomic.com – Open, accessible and accountable news, sport, culture and lifestyle.

Read more

© 2019 thelondoneconomic.com - TLE, International House, 24 Holborn Viaduct, London EC1A 2BN. All Rights Reserved.




No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Sport
  • Entertainment
  • Lifestyle
  • Food
  • Travel
  • More…
    • Elevenses
    • Opinion
    • Property
    • Tech & Auto
  • About Us
    • Meet the Team
    • Privacy policy
  • Contact us

© 2019 thelondoneconomic.com - TLE, International House, 24 Holborn Viaduct, London EC1A 2BN. All Rights Reserved.