Batten down the hatches for the Brexit storm

It looks like the perfect storm. Brexit is looming on March 29. And it may precede a global downturn with higher prices, energy costs and interest rates all racking up pressure on our family budgets. Economic downturns usually come in seven-year cycles – and it’s 10 years since the last one. Global banking powerhouse Morgan Stanley this week pencilled in 2020 as the date for the next US downturn, as have several other research outfits.

Also this week, credit rating agency Moody’s issued a report stating that Europe was worse placed now than in 2008 to withstand a major crash.

Global debt is higher than ever and central banks have already spent trillions and slashed interest to zero to combat the last crisis. They have no ammunition left to deal with another one. On the positive side, the downturn may be relatively minor compared to the last time.

Our banks are much safer now thanks to tougher regulation and there is nowhere near the same level of toxic debt that dragged us down in 2008.

Even so, it might be a good idea to batten down the hatches.