Recession risk highest since the financial crisis

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Jul 18, 2019

The UK faces a greater risk of recession than at any point in the last decade, according to new analysis from think-tank the Resolution Foundation.

Bloomberg reports that a combination of low economic growth, a falling pound and a creeping current account deficit are putting the most pressure on the economy since 2007.

The think-tank uses government bond yields as one of its measures, but argues that a low interest rate environment and quantitative easing are losing their power as tools to stimulate the economy in the current climate.

Resolution’s report argues that, on average, a million UK jobs were lost in each of the last five recessions, but that swift government action had prevented the most recent crash from being 12 per cent worse.

Bloomberg quotes Resolution research director James Smith as saying: “While recessions differ in terms of the cause and effect, they are all uniformly bad for living standards…Policy makers can’t prevent recessions from happening, but they can limit their damage with the right policy response.

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