Daily Archives: September 5, 2011

The global economy, at least in the developed markets, seems poised on the brink of a renewed recession. The growth in real GDP, at an annualised rate, has dropped to around 1 per cent or less in both the US and Europe, and it seems unlikely that growth can continue to hover at this low level indefinitely. Either unemployment will start to rise, in which case recessionary dynamics will take hold, or growth will rebound towards its 2-2.5 per cent long-term trend, and the world will have experienced a narrow squeak.

Which is it to be? I do not claim to know the answer, but I can suggest a few key indicators to watch. In August, these indicators suggest that growth has stabilised at a very low level, rather than nosediving towards imminent recession. Read more