We’re in a recession – what’s happening to the financial markets?

Published on

In view of the recent announcement that the UK has now entered its deepest recession since records began, let’s take a deep breath and think about what this really means in the financial markets.

Further to the Coronavirus pandemic, it’s no surprise that the country finds itself in this position. With this foresight, the financial markets had generally already priced this situation in, well before yesterday’s announcement. In fact, on the day of the recession announcement, the FTSE 100 closed at its highest level for three weeks!

This rise assumes, in part, that investors are now relying on continued low interest rates and more financial stimulus from central banks however, it positively underlines that the markets are not simply reacting to ‘headlines’!

There are indications that consumer spending increased in June beyond economists’ expectations, providing those positive green shoots. However, the message remains that we continue to be in a volatile position and that the UK still faces a big challenge ahead.

To chat about your investments, opportunities or worries please don’t hesitate to give us a call.

Richard Sykes, Associate Director

 

Note: The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Copyright © Davidsons IFA Limited 2020