London, UK, May 22nd, 2025, FinanceWire
Investment firm Northern Markets today released a formal statement addressing growing concerns about the potential onset of a global recession. The warning comes as international financial markets experience heightened volatility in response to recent policy decisions, persistent economic uncertainty, and escalating geopolitical tensions.
The statement comes after weeks of increased volatility brought on by a number of protective measures, such as US tariff increases. Due to the pressure on equity markets and the downward trend of important indicators like the price of copper and oil, financial experts are now warning that the world economy may be slowing down in tandem.
Trade Policy and Market Impact Heighten Recession Risk
Recently, there have been significant declines in equity markets. This has mostly been ascribed to investor apprehension over the long-term profitability of significant global corporations. In addition, the U.S. administration’s recent tariff measures have increased prices across a number of industries, which has caused investors to reassess their projections for future profits.
“Markets are forward-looking by nature,” said Michael Novik, Senior Investment Manager at Northern Markets. “When we see such a sharp contraction in valuations across sectors tied to international trade, it’s a clear signal that expectations for global growth are shifting. The tariffs introduced this year have added an inflationary impulse to the supply chain and reduced confidence in cross-border investment.”
Banks and financial institutions, typically regarded as economic barometers, have seen their valuations decline. HSBC and Standard Chartered, both deeply entrenched in international trade finance, have recorded year-to-date losses exceeding five percent. These declines point to deeper structural concerns about economic activity beyond the financial sector.
Adding to the stress are commodity markets, where copper and oil, widely seen as indicators of industrial and consumer demand, have each dropped more than 12% since the onset of the tariff changes. While not definitive proof of a recession, these figures add weight to the growing unease among investors and policymakers alike.
Slowing Growth in Major Economies Raises Red Flags
Though official recession declarations require two consecutive quarters of economic contraction, current data trends suggest that the probability of such conditions forming has increased. In the United Kingdom, GDP growth stalled at just 0.1% between October and December, and initial figures for the start of 2025 have shown a mild contraction.
“The risk of recession isn’t just theoretical anymore,” Novik noted. “We’re seeing early-stage indicators from multiple regions that point to a broad-based deceleration. Europe and the UK are particularly exposed due to their reliance on export-driven growth and banking sector vulnerabilities.”
The potential consequences extend beyond the private sector. Governments may have large tax revenue shortages if economic activity continues to drop, even though they may momentarily profit from lower borrowing costs as investors move into safe-haven assets. For instance, projections indicate that government borrowing costs in the UK might decrease by £5–6 billion annually. However, that saving is likely to be outweighed by reduced income, corporate, and consumption tax collections in a downturn scenario.
Handling the Future Uncertainty
Businesses and investors are increasingly being urged to exercise prudence in light of the ongoing uncertainty in the economic outlook. They are being counseled to keep their plans flexible and to rely on data-driven initiatives. Although risk estimates have lately undergone significant changes, current predictions do not predict a worldwide recession such as the COVID-19 pandemic or the 2008 financial crisis.
“Resilience and readiness are crucial,” Novik emphasized. “Diversification, stress testing portfolios, and maintaining strong liquidity positions are vital steps in an environment where market dynamics are being shaped by policy decisions as much as economic fundamentals.”
About Northern Markets
Northern Markets is a global investment platform dedicated to providing diversified access to a wide array of financial instruments, including equities, digital assets, commodities, and more. With a mission to empower investors through innovation, insight, and security, Northern Markets is at the forefront of the changing investment landscape.
Website: https://northmarkets.io/