Risk assets fell sharply in the month of September, with equities generally down by between 5 and 10 per cent, and commodities falling by even more than that. The best performing asset in the month was the US dollar effective rate, a clear symptom of the widespread flight to safety. The worst performers were equities in the BRICs, and cyclical commodities like copper. (See charts on asset performance here.)

What had appeared to be mainly a problem for European markets in August has therefore broadened considerably in the past few weeks. The financial markets have started to price in a global recession. They will be very sensitive to the next move in the economic data. So far, it is hard to tell whether a renewed recession has  been triggered, or whether the developed world has “only” become stuck in a period of prolonged stagnation. Either outcome would be bad enough for labour markets, and risk assets – but there would still be a large difference between them, which is why the question matters a lot.