Is a recession coming? What next for the pound? Your questions answered
Markets Today asked our Instagram followers what they wanted to know. The questions ranged from how to gauge the outlook for the economy and currencies, to trends in stock trading and how to approach a company earnings report. Here — in a lightly edited transcript — are our answers.
What are the risks of a recession?
As luck would have it, Bloomberg tracks the aggregate view of economists on this very question, so we can see what the current view is, and how that has changed over time.
In the UK, economists currently put the risk of a recession over the next year at 30%, down from 60% at the start of the year. In the US, the figure is also 30%, this time down from 50% in January.
So in summary, economists seem less worried about a recession now than they did earlier in the year, reflecting growing confidence that central banks can achieve a soft landing — exiting high interest rates before they crash their economies. With rate cuts already underway in the UK, and seen as imminent in the US, the thinking is the worst may be over, at least for now.
Still, as the market meltdown earlier this month (partly sparked by slightly sluggish US jobs data) showed, there are still considerable jitters surrounding growth out there.
How about the outlook for currencies?
For much of the early part of 2024, currency volatility was in the doldrums, as traders took the view that central banks would move largely in unison when it came to rate cuts. That translated to a first quarter when the euro saw the third-tightest range since
