Are markets signalling that a recession is due?
August 15, 2019 5:24 am
Financial markets have flashed a warning sign about the economic outlook for the UK and the US.
It is known in the jargon as an “inverted yield curve”.
It means that it is cheaper for those countries’ governments to borrow for 10 years than for two.
It is an unusual development and it often comes before a recession or at least a significant slowdown in economic growth.
Wall Street shares plunged on Wednesday, as investors’ concerns about a potential recession were stoked by the news.
The main US stock market indexes fell between 2.3% and 2.6%. Meanwhile in Europe London’s FTSE 100 slipped 1.4%, Germany’s Dax lost 2.2% and the French Cac 40 fell by 2.1%.