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UK at risk of double-dip recession

The UK economy fell by 2.6% in the month of November, slightly better than forecast but this does not bode well for overall fourth quarter growth.

Monday, January 18, 2021

The UK economy fell by 2.6% in the month of November, slightly better than forecast but this does not bode well for overall fourth quarter growth. Lockdown restrictions came into effect in the month of November, before a modest reopening in December and now a full lockdown again in January. The UK economic picture is not pretty and these double punches are likely to lead to further weakening growth in the months ahead, so a double-dip recession is more than likely, as since peaking in August last year, growth has been on a linear down trend to where it stands now. As if all this was not bad enough, the new trading relationship with the EU is only going to add to the growth impediments. All in all, this leads us to continually side-step UK risk assets for the time being.

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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is no indicator for the current or future development.

Charles Hepworth

Investment Director
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