BRITAIN and the world could be about to enter a recession that will be more brutal than 2008 thanks to China’s slowing economy, experts fear.
China’s has the second largest economy in the world and represents around 12 per cent of global GDP and 18 per cent of global manufacturing exports.
At the same time, it has built up huge levels of debt within its stock market helping to create a huge bubble that now looks set to burst.
Chotaro Morita, chief fixed income strategist at SMBC Nikko Securities, said: “The fact that U.S. and European shares fell below their August lows, failing to sustain their rebound, is significant.
“We are coming to a stage where we need to consider the risk of recession in the global economy.”
Meanwhile, the debt piles of the British and American governments have leaped since 2008, putting both countries in worse position than when the last crisis hit.
The combination of factors could prove to be a toxic cocktail that sparks financial meltdown across the world and a recession that is more severe than in 2008.
And unlike 2008, British and US policymakers will not be able to cut interest rates much further to relieve pressure.
With higher levels of debt, governments may also find it harder to step in to rescue huge financial corporations if they look set to go bankrupt.
The resulting could mean economic meltdown with widespread devastation.
Full article: WORLD IN FINANCIAL MELTDOWN: Global economy set for recession WORSE than 2008 (Express)