The Recession Nobody Wants to Name

By Dominus Owen Markham

We are, as a species, remarkably gifted at financial self-deception. We’ll cheerfully tap a contactless card on a round of drinks we can’t afford, stare at a mortgage statement we don’t fully understand, and nod along to a news segment about “economic headwinds” as if that phrase means anything other than things are about to get worse and nobody wants to be the one to say it.

We’ve been doing this for years now. Collectively. Professionally. On a global scale.

And the bill, I’m afraid, is starting to arrive.

The Word Nobody Will Say

There’s a reason economists reach for phrases like “synchronised global slowdown” and “demand-side contraction pressures” rather than just saying recession. It’s the same reason estate agents say “bijou” instead of “tiny” and doctors say “we’re monitoring the situation” instead of “I’m honestly quite worried.” Language, when wielded carefully enough, can delay reality by several news cycles.

But here’s the thing about reality. It doesn’t actually care what you call it.

The signals have been flashing for a while now. Growth across major economies has weakened noticeably. Europe is practically moving in slow motion… France, Germany, and Italy are all projected to grow at under 1% this year. Those are numbers so thin that a single bad quarter tips any one of them into the technical definition of a recession. The UK, marginally insulated by its trade arrangement with Washington, is still only looking at roughly 1.3% growth according to IMF projections. Which, to be clear, is not a triumph. That’s the economic equivalent of surviving on cereal and calling it a diet.

And yet the official tone remains… measured. Cautiously optimistic, even. Because cautiously optimistic doesn’t cause a bank run.

The Debt Nobody Talks About At Parties

Let me tell you what actually concerns me. Not the headline numbers, which are bad enough. It’s the structural fragility underneath them.

Government debt levels globally are, to use the technical term, eye-watering. Most major economies borrowed staggeringly during the pandemic… a decision that was probably necessary and is now quietly throttling their ability to respond to whatever comes next. When the next shock arrives, and it will, the usual toolkit looks considerably more bare than it did in 2008 or even 2020.

The consumer picture isn’t much prettier. In the US, high interest rates throughout 2024 and 2025 have done considerable damage to household balance sheets. Analysts are pointing to rising delinquencies and slowing job growth as the kind of cracks that don’t necessarily break things on their own… but have a nasty habit of combining into something far more serious when the conditions are right. One economist described the American consumer as being “up to their eyeballs in debt” and the current environment as so fragile that almost any external shock could tip the whole thing. For context, that particular economist was one of the first to identify the housing bubble before the 2008 crash. He’s not someone given to casual catastrophising.

Meanwhile, in China… the property sector remains deeply depressed, consumer confidence is soft, and government attempts to stimulate spending have, to date, produced what analysts diplomatically describe as “no great signs of activity.” China accounts for an enormous share of global growth. When it coughs, the rest of us tend to catch something.

The Tariff Situation, Or: How To Recreate The 1930s With Better Branding

Here is where I confess that I find the trade policy situation genuinely, almost impressively, alarming.

The tariff regime introduced by Washington has caused the kind of disruption that economists reach for historical comparisons to describe… and the comparison they keep landing on is not a flattering one. UCLA Anderson’s forecast analysts noted that if fully implemented, the effective tariff rate would rise to levels comparable with the Smoot-Hawley tariffs of the Great Depression era. Smoot-Hawley, for those who don’t have a background in catastrophic economic policy, helped turn a bad recession into a decade-long global catastrophe.

Now. I’m not saying that’s what’s happening. I’m saying that’s what serious economists at a respected institution felt compelled to reach for when looking for a comparison. Which is… not nothing.

The wider effect of trade uncertainty is harder to quantify but arguably more insidious. Businesses don’t invest when they can’t predict the rules. Consumers don’t spend when they feel anxious about the future. And when both of those things happen simultaneously, across multiple major economies, the technical recession definition becomes somewhat academic. The damage is already occurring. It’s just diffuse enough that we’re not quite forced to name it yet.

The AI Bubble In The Room

I want to talk about something that doesn’t get enough serious scrutiny outside of financial circles, and that’s the extraordinary concentration of recent economic growth in AI investment.

Investments in AI technology reportedly made up more than 90% of US GDP growth in the first half of 2025, according to estimates cited by Harvard economist Jason Furman. Read that again slowly. AI stocks now account for roughly a third of the entire S&P 500 by market capitalisation. This is, depending on your disposition, either the most exciting thing happening in the global economy or the most terrifying… and possibly both simultaneously.

The issue isn’t AI itself. The issue is what happens if the returns don’t materialise at the speed the valuations demand. Equity valuations in the tech sector are at levels that, as one analyst noted, parallel the dot-com bubble. The dot-com bubble, as a reminder, did not end well for anyone who’d convinced themselves that this time was different.

If that correction comes, it doesn’t stay in Silicon Valley. It moves through pension funds, through consumer confidence, through the financial sector’s willingness to lend. It becomes, in the dry language of economic analysis, a “recessionary amplifier.” In plain English: it makes everything else dramatically worse.

So Why Isn’t Anyone Screaming?

This is the part that genuinely puzzles me.

A McKinsey survey of global executives found that nearly seven in ten now consider a recession scenario the most likely outcome for the global economy. Seven in ten. That’s not a fringe view. That’s a substantial majority of the people who are actually running major organisations, looking at the same numbers I’m looking at, and concluding that this probably ends badly.

And yet the public conversation remains strangely… muted. We get “headwinds.” We get “uncertainty.” We get “monitoring the situation carefully.” We get central banks holding rates steady and finance ministers talking about resilience and the IMF publishing projections that are technically not catastrophic if you squint at them from the right angle.

Part of this is rational, in a bleak sort of way. Confidence is itself an economic variable. If the Governor of the Bank of England stood up tomorrow and said “honestly, I think we’re in serious trouble,” the resulting panic would accelerate the very outcome he was describing. There’s a reason these things are managed in carefully modulated language.

But there’s a difference between managing communication responsibly and simply not telling people that the house might be on fire because you haven’t quite decided whether to call it a fire or “an elevated thermal event in a domestic setting.”

What This Actually Means For Ordinary People

I want to be straightforward here, because I think a lot of economic writing does a disservice by floating comfortably at the altitude of indices and projections without ever landing on what any of it means for a person trying to run an actual life.

It means that if you have debt… particularly variable-rate debt, credit card debt, anything with a rate attached to the current interest environment… you are more exposed than you probably feel. The period of relatively cheap money is over. The period of “we’ll see how long rates stay elevated” is ongoing. Plan accordingly.

It means that if your income or business is dependent on consumer confidence… retail, hospitality, discretionary services of any kind… the consumer is more fragile than the headlines suggest. The headline numbers are being held up by high-income earners whose wealth is tied to asset markets. The bottom 60% have been struggling for a while. If those asset markets wobble, the top-end spending that’s been quietly supporting a lot of sectors wobbles with it.

It means that the safety nets… government intervention, fiscal stimulus, central bank flexibility… are thinner than they were the last time we needed them. Debt-to-GDP ratios in most major economies leave considerably less room to manoeuvre than existed in 2008 or 2020.

None of this is inevitable. Economies are not physics. They’re made of human decisions, and human decisions can change. But they tend to change faster in response to clarity than in response to managed ambiguity.

A Brief Note On Not Panicking

I want to be clear about something. This is not a prediction of imminent collapse. The serious analysts are not saying that either. Capital Economics, for instance, makes the reasonable point that risks don’t all point in one direction, and that economies have “a habit of quietly doing better than expected.”

That’s fair. It’s also worth remembering every time you read a headline about resilient growth and stable outlooks.

The rolling recession theory… the idea that different sectors contract at different times, masking the aggregate picture… is real, and it’s been operating for several years now. Tech workers who lost their jobs in 2022 didn’t need a formal recession declaration to know what a recession felt like. Neither do the manufacturing communities, or the parts of retail that have been hollowed out quietly while the AI stocks made everyone feel like things were basically fine.

The question isn’t really whether we’ll have a recession. Given enough time, we always do. The question is whether, when it arrives in its full and undeniable form, we’ll be able to say we saw it coming.

Because we can see it coming.

We’re just choosing, collectively and apparently by consensus, to look slightly to the left of it and talk about something else.

I find that choice… interesting. And I find it, increasingly, untenable.

The Inconvenient Conclusion

I don’t have a tidy solution for you. I’m a writer, not a central banker, and anyone offering you a tidy solution to a potential global recession is either lying or selling something.

What I do have is this: the information is available. The signals are not hidden. Economists at UCLA, analysts at ING, researchers at Capital Economics, McKinsey’s own surveyed executives… they’re all looking at the same structural fragility, the same debt burdens, the same trade disruptions, the same overheated asset valuations, and concluding, in various politely hedged ways, that the situation warrants serious attention.

So pay serious attention. Not panicked attention. Not catastrophising-in-your-kitchen attention. Just the clear-eyed, honest kind that lets you make better decisions than the person who decided, like the rest of us at that dinner table, to just reach for the wine and change the subject.

The conversation is happening whether we join it or not.

I’d rather be in the room.

For further reading on the structural risks outlined in this piece, see the UCLA Anderson School of Management Recession Watch analysis and the EconomicLens Global Recession Risk Index 2025–2026.

Until Next Time