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Is the UK in a recession?

21/10/2022

In August 2022, a survey of UK retail investors revealed that 62% believed the UK would enter a recession before the end of the year. 

This survey, of course, was conducted before the Governments mini September budget, which had a significant impact on the UK economy. So, where are things now – and where are they going? 

 

Is the UK in a recession?

The recent base rate increase, plus the falling value of the pound and overally volatility of the market, have led some experts to suggest that the UK is already in a recession. However, with multiple definitions of what a recession actually is, others believe that it has not yet happened. 

Some state that a recession is defined by two consecutive quarters of real GDP decline, which would suggest that a recession is already upon us. However, others believe that GDP should not be the only indicator of a recession: other factors should also be considered. 

In late September, though, the Bank of England announced that the UK was already in recession. What does this mean for investors?

 

How will other investors handle the recession?

The survey data from August shows that some investors are planning on changing their portfolios as a result of the recession. With 55% of respondents saying that they are now “risk-averse”, the results show a move away from asset classes like crypto, private equity and classic cars, and a move towards assets like gold and stocks. 

The most popular asset class, according to this survey data, is stocks and shares, with 19% of respondents intending to invest in them over the coming year. It may be that they are expecting prices to bounce back up, and so are taking advantage of current lower prices. 

How are you planning on riding out the recession? 

 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

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