We’re in the calm before the storm. Soon, dark clouds of economic misery will burst, and a tidal wave of poverty will consume the planet. That’s what the experts are saying, anyway. A new global recession is in the offing, analysts believe, a reaction to a uniquely noxious cocktail of financial agitators – the US/China trade war, the threat of a no-deal Brexit, contagious slowdowns in some of the world’s biggest economies, and lingering effects of the last big collapse. The global economy is resilient, and could weather any one of these. But combined, a wide scale downturn seems unavoidable. 

Months of dire financial rumblings came to a head on August 14, investors’ worst day of the year. Britain’s FTSE fell by 1.4%. CAC, the French market index, leaked 2.1 points, while Germany’s DAX fared even worse, sliding 2.2%. But it was the 2.5% tumble on the US Dow Jones that caused most concern. From the Wall Street Crash of ‘29 to the Great Recession eighty years later, history tells us one thing: when the American economy slumps, the world follows.

It should be heartening then that, by a number of measures, US finances are doing fairly well. Now in its eleventh consecutive year, America’s current economic expansion is the longest running period of growth on record. Employment rates are at their highest in fifty years, wages are rising, credit is easy to acquire, and oil remains affordable. Furthermore, the heady financial exuberance and industry bubbles – like dot-com in 2000, or housing in 2007 – that often foreshadow a crash aren’t apparent.     

But dig a little deeper, and experts say there’s reason to be worried. A downward trend in some global economies is becoming contagious, Morgan Stanley’s chief economist Chetan Ahya warned recently, adding that “the wheels for a slowdown are in motion”. 

“Even as we have been revising our growth projections lower, we continue to highlight that the risks remain decidedly skewed to the downside,” he wrote in a note to clients last week. “We expect that if trade tensions escalate further… we will enter into a global recession”. 

He’s not alone in his rebuke of Washington’s divisive trade war with China. Convinced of Beijing’s unfair commercial practices, Mr Trump has made mounting tariffs a hallmark of his presidency. Duties of up to 25% cover a wide range of products, from handbags to railway equipment. Responding in kind, China has imposed tariffs on hundreds-of-billions of dollars worth of US exports. 

More than the levies themselves, Trump’s erratic policy-by-tweet approach is confounding American business. An unpredictable Oval Office makes it difficult for firms to plan their operations, with no clear indication whether tariffs will rise, fall, or remain steady for weeks, months or even years. This confusion is having an adverse effect on global investment – Standard & Poor, a financial services group, estimates some $6 trillion is being sat on by wary companies unwilling to spend amid the trade war’s uncertainty.

Hamstrung by the commercial conflict, China’s domestic economy is faltering also. The growth of industrial production has slowed to levels unseen in 17 years, mirroring an overall decay in Chinese economic expansion. Dependent on the Far East market, economies elsewhere are feeling the effects. Germany, Europe’s largest exporter, is in recession. Sales of its machine tools, trucks and cars have spiralled thanks to a collapse in Chinese demand. Berlin has now recorded two consecutive quarters of GDP decline, causing business confidence to fall to its lowest level since the 2008 financial crash.

The UK’s desperate situation is doing little to calm nerves on the continent. With neither London nor Brussels willing to compromise on their Brexit demands, a no-deal departure on October 31 seems all but inevitable. Fearing this eventuality earlier in the year – before eleventh hour interventions pushed Brexit back – British businesses built up stockpiles. These have since been run down, greasing the wheels for an economic contraction – the first the UK has experienced since 2012.      

Worst still, analysts say no-deal brinkmanship is fuelling financial anxiety and hurting investment. “Brexit uncertainty is limiting appetite to expand, but contingency planning activities ahead of 31 October may also limit resources available for possible investment projects,” said James Smith, Developed Markets Economist at ING, a bank. “Sentiment among shoppers has remained fairly depressed, hinting at a reduced willingness to make bigger ticket purchases,” he added.  

A world recession need not be inevitable, however. Accepting the premise that a global slowdown would start in America, it’s surely there that one could be prevented. The dialling down of the US/China trade war is an obvious place to start. Negotiations are ongoing – that’s the good news – but there’s no sign of conciliation, with more tariffs being added weekly.

Tax cuts have also been mooted by the president, with employee payroll and capital gains duties earmarked for the chop. Neither are confirmed however, with Mr Trump championing cuts one day, only to row-back the next. A reduction in tax would, theoretically, spur greater spending and investment, keeping the economy buoyant. 

A third target could be interests rates. The Federal Reserve, America’s central bank (and Trump’s favourite economic bogeyman) has been facing renewed attacks from the Oval Office over interest levels. In the hope of kick-starting growth and calming jittery financial markets, the president wants rates lowered. But with interest as low as it currently is – 2.25% – some worry that further cuts would reduce the US’s capacity to fight a recession if one emerges.    

And with the world’s two largest economies at loggerheads, the imminent – and unprecedented – withdrawal of an EU member state, and a number of countries slipping into slowdown, the onset of a worldwide slump doesn’t seem far fetched. Acknowledging this, the IMF last month cut forecasts for global growth to 3.2%, the weakest rate of expansion since 2009. The weather hasn’t quite turned yet, but storm clouds are certainly gathering.