Should we be concerned about a double dip recession?
If the UK stock market does look around nine months ahead, as many analysts believe, should we be concerned about a double dip recession as the FTSE 100 falls below 5000 for the first time in seven months?
There is a myth, or a reality according to many, that the UK stock market tends to look nine months ahead and can be a very interesting indicator for the future. As a consequence, the recent fall in the UK stock market is concerning many investors who are more worried about the European Union than the UK individually. Even though the UK is not part of the Euro zone, having refused to adopt the euro in the short-term, much trade is carried out between the UK and Europe and the UK is still a major component of the European Union.
While there are problems at home with regards to the UK economy there is no doubt the major concerns at the moment are centered around Europe and the Euro itself. However, until we see a bottoming out of these concerns, and potentially a sell-off across Europe and worldwide stock markets, the ongoing flight from "risky assets" to "safe havens" is likely to continue.
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