Act now to get ready for recession – UK’s think tank

The Resolution Foundation, a British think-tank, forewarned that the UK should prepare for its next recession and manage ways to avoid it, as Brexit approaches.

Key Findings:

“Bank of England could muster only a quarter of the firepower needed in a typical recession because its key interest rate is so low and its bond-buying program is likely to prove less effective now.

Now is the time to plan for the next recession – because the one thing we know for certain is that it will happen.

The UK today faces the highest recession risk since the financial crisis, and lower-income households are now more exposed to a downturn than they were back then.

Urged Britain to go beyond tweaking its existing toolkit and to consider the case for raising the BoE’s inflation target above its current level of 2% although it conceded such a move would be challenging to carry out.”

The Cable is seen consolidating the overnight drop below 1.23 handle, awaiting fresh Brexit developments and crucial UK macro news.