It was around this time last year that Alan Greenspan said he put the chances of a US recession at about one in three. Not many agreed with him at the time, they felt he was being far too pessimistic.
Now a similar projection is being made about the UK. According to a report produced by the chief European economist at Lehman Brothers, there is slightly over a one in three chance the UK will fall into recession.
The Lehman man said, The chances that the UK economy will follow a path similar to that of the US now seem sufficiently high to warrant considerable investor interest in the possibility of much more aggressive action from the Bank of England, akin to that taken by the Federal Reserve.
Mr Hume said, The probability of a technical recession of two quarters of negative growth at some point over the next two years has now risen to about 35 per cent. We put the probability of an outright recession of negative year-on-year growth at 20 per cent.”
And from us, here is a warning. Expect more and more reports of this nature over the next few months.
Mr Hume seems to think that the catalyst of a UK recession would be falls in UK house prices and you know what we think about that.
© Investment & Business News 2013