UK WORRIES OVER RECESSION

By now most traders that follow economic indicators have gotten used to the never ending negative prints.  And obviously, the current crisis in the euro zone is not helping any.

Even CBI, a leading business lobby (Confederation of British Industry) expects unemployment to rise in the coming year, although they maintain a slightly positive outlook stating that they do not expect a recession but a gradual slow recovery.  In a recent statement the CBI warns the govt to not water down the austerity pledge and remain on course towards erasing the govt's massive budget deficit.

Economic indicators have been very negative and has triggered many successful short positions here at HappyTradersFx, although we have been on the sidelines in the past week as we see signals of a short squeeze.

The fear of a recession in the UK has made the headlines in recent months.  While inflation remains well above the BOE's target range the bank has decided to support the economy with a fresh round of Quantitative Easing during the last meeting.

The CBI remains cautiously optimistic by cutting its growth forecast to 0.9% this year and 1.2% the next.  They note that the risk of a double dip has risen but that their main forecast remains for slow moderate growth.

Europe is the UK's major trading parnter and relies on exports to European countries.  The fear of a major financial meltdown in Europe has had a huge impact on business sentiment in the UK causing many businesses to hold off hiring new workers.

INFLATION