Fears of UK Triple-Dip Recession Could Cause Stock Market Slump
Online forex trading investors will no doubt have been relieved by the stock market’s positive start to 2013 but now fears of a triple-dip recession in the UK could risk reversing the gains made and force the market back into a nose dive.
On the back of recent uncertainty in the Eurozone caused by the Cyprus bailout and growing fears of economic catastrophe in Slovenia, the UK’s continual teetering on the brink of recession is causing concern among traders and recent gains on the stock market have already begun to fall away.
This is despite the FTSE 100 index of Britain’s biggest companies peaking in March after making significant gains since the start of the year.
Investor confidence may have been boosted by a possible interest rate cut by the European Central Bank next week but economic data to be published this Thursday could confirm the feared triple-dip recession in the UK and lead to a rapid loss of confidence in the market which would have a negative effect on the FTSE.
Only yesterday the Office for National Statistics in Britain confirmed that the UK borrowed £120.6 billion last year, some £30 billion more than Chancellor George Osborne predicted as he struggles to reduce the budget deficit and instigate growth in the country.
However many experts believe that the FTSE may stabilise and end the year in a similar position to where it currently stands although volatility across the world is likely to have an impact on the stock market due to the UK’s reliance on overseas growth.
The recent slowdown in China and the surge in house prices in the US is evidence of the on-going unpredictability of the global economy. Investors will no doubt keep their hands firmly on the wheel as they anticipate the next hairpin bend on the 2013 financial route.