Recession – what’s the potential impact on investors?

• In August, the Bank of England (BoE) provided a gloomy outlook for the UK economy. Forecast for peak inflation hit 13%, although the recent energy support package should help to avoid these levels
• A weak UK economy could boost the value of overseas assets if sterling remains weak
• Equity markets tend to fall in anticipation of a recession, but investment opportunities may arise once the recession eventually arrives

What is a recession?

Although formal definitions vary by country, a recession generally means a sustained period of economic contraction which usually involves a fall in spending and a rise in unemployment. The UK and other countries define a recession as two successive quarters of negative GDP growth. However, in the US, a broader definition is used that takes into account a wider set of metrics such as unemployment, industrial production and real income.

What is behind the BoE’s forecasts? Download our full update to find out more.