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UK’s Recession Risk Is at Highest Rate Since 2007

By Yana Berman

The recession risk for the U.K. economy has reached its highest level since 2007, according to a report by an independent British think tank Resolution Foundation published in July.

The recession risk indicator used by the think tank uses government bond yields to assess the threat from a recession. During the last 12 years, the country only experienced sharp slowdowns, but there were no technical recessions.

UK’s Recession Risk Is at Highest Rate Since 2007

As per the analysts, the current risk is closely related to Brexit uncertainty and overall economic slowdown. The Resolution Foundation analysts warned that the British government needs to develop urgent plans to reduce the impact of the possible downturn.

According to CNBC, there is evidence that the U.K. economy is already contracting. June was the worst month for manufacturers in more than six years. Moreover, last month the Bank of England cut its forecast for economic growth in Q2 2019 to zero.

In April, Brexit was delayed until October 31. Due to the ongoing political tensions, British prime minister Theresa May left the office. Tory frontrunner Boris Johnson promised that the country would leave the EU by Halloween regardless of a deal in place.

Tokenised securities are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how tokenised securities and leverage work and whether you can afford to take the high risk of losing your money. Nothing in the above article should be regarded as a recommendation to trade generally, to trade on a particular platform or to trade in a particular asset. Asset prices can go down as well as up and past performance is not a guide to future performance. Investors and traders should thoroughly research an asset or strategy before making any trading or investment decision and if necessary seek professional advice.

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