Its a torrid day on the stock exchange with falls of 5% to 25% across the banking sector. This leaves the Royal Bank of Scotand (RBS), Halifax Bank of Scotland (HBOS) and Bradford & Bingley all trading below their deeply discounted rights issues. The banks, estate agents and house builders may all be in trouble but is there a recession? Technically no. The preferred definition of a recession is two consecutive quarters of declining GDP. At the moment the available data tells us the economy is still growing. However, there is litte good economic news and what we get seems to imply there's a recession on its way. My definition of this is a pre-cession. Its going to happen but its not here yet.
The bad economic news contrasts with my day to day feedback from clients. Most will admit trading conditions are tight. But they are far from declining. I have picked up two new clients in the past month. And one client has announced he is to treble his marketing budget. I get the distinct feeling that athough the financial and building sectors are in trouble, much of the rest of the economy remains largely unscathed.
