The “Old Lady of Threadneedle Street” simulated a variety of scenarios to reach these conclusions4. In the worst case scenario, UK GDP might slump by as much as 8%. That would be a more severe recession than after the financial crisis, and it wouldn’t leave us unscathed, either.
This slowdown is mainly due to the weakness of international trade in an environment of persistent uncertainties related to protectionist policies and geopolitical factors. These factors are increasingly weighing on economic sentiment and, in particular, on the manufacturing sector. Accordingly, countries which have a relatively large manufacturing sector are more exposed to the current slowdown, with Germany a case in point.