Could a recession be next?

How can a new incumbent of No. 10 survive without a majority and with Brexit to solve? It defies the imagination. Yet if they do survive Brexit, against all odds, there could be an even bigger horror waiting around the corner: global recession.

For three years the economy has defied doom-laden predictions by aggrieved remainers. Suddenly, though, the economic news is looking ominous. In May, retail sales fell by 2.7 per cent compared with a year earlier. The manufacturing Purchasing Managers’ Index (PMI), an indicator which runs a month ahead of Office for National Statistics data, plunged from 53.1 in April to 49.4 in May, where any figure below 50 denotes shrinking activity. It was inevitably blamed by many on Brexit, but the gathering downturn is global. In the eurozone, the PMI for manufacturing has been below 50 for four months — and in Germany it is down to 44.3. It isn’t just Germany’s industrial sector: the economy as a whole avoided recession in the last three months of 2018 by the skin of its teeth.