There were fears of a looming global recession as analysts cite trouble in five of the world’s 20 largest economies.
The UK economy shrunk in the second quarter. Data published on Wednesday revealed that Germany’s economy contracted in the three months to June. Even China’s massive economy was growing at the slowest pace in nearly three decades.
And in a survey in the US, more than a third of asset managers said they expected a global recession in the next 12 months.
Econometrix economist Azar Jammine said the world was facing the consequences of decisions to increase debt levels in advanced economies in order to stave off the worst effects of the global financial crisis.
“Central banks have artificially suppressed the debt servicing costs of their governments by pumping an unprecedented $12 trillion into the financial system. It’s been an attempted kick in the can down the road to try and delay the effects of the global financial crisis of 2008. There’s going to be a time of reckoning.”