Recession Risks Spark U.K. Market Jitters Ahead of BOE Decision
- Retail stocks, the pound and sterling junk bonds have all slid
- Money markets bet the BOE will have to pivot to rate cuts
The Bank of England (BOE) in the City of London.
Photographer: Chris Ratcliffe/BloombergThis article is for subscribers only.
U.K. markets are sounding the alarm over a potential recession, piling pressure on the Bank of England to balance curbing surging inflation with protecting growth.
An index of discretionary retail stocks has tumbled 26% this year as consumer confidence slumps to the lowest since 2008, while nearly 2,000 businesses are in critical financial distress. The pound is trading at levels not seen since the early days of the pandemic, and money markets bet central bankers will have to cut rates in coming years after sharp hikes in 2022.