World closer to first recession in a decade as trade war fears spread

While tight labour markets globally and the recent shift by central banks should provide a cushion, economists are starting to war-game for how a recession could happen

The escalating trade war between the US and China is nudging the world economy toward its first recession in a decade with investors demanding politicians and central bankers act fast to change course.

In the US alone, the recession risk is “much higher than it needs to be and much higher than it was two months ago,” Lawrence Summers, a former US Treasury secretary and a White House economic adviser during the last downturn, told Bloomberg Television. “You can often play with fire and not have anything untoward happen, but if you do it too much you eventually get burned.”

Summers, who