The shaky global economic recovery is at risk, says Roger Nightingale, a strategist at Pointon York, a U.K. pension-investment manager.
Central banks in nations with strong economies began raising interest rates last year. The European Central Bank already has boosted rates this year, and more central banks will follow suit in the months ahead, he tells CNBC. And that makes the global economy vulnerable to a downturn.
During the current business cycle, the world economy has underperformed during its strong and weak periods, Nightingale says.
“The outlook is not good. Activity is due to peak again this autumn. Thereafter, another recession may occur,” he argues. “It’s possible it’ll be a severe one because large numbers of central banks will have raised interest rates into the slowdown.”
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The high levels of personal debt and low levels of consumer confidence could cause a recession as vicious as the one we’re recovering from now, Nightingale says. And gains in corporate earnings and the stock market won’t last, he maintains.
Some economists are particularly worried about the U.S. economy, given its sluggish 1.8 percent growth in the first quarter.
"Just about every piston in the engine lost its power during the quarter," Sung Won Sohn, an economist at California State University, told The Associated Press. "I don't think all those negative factors are going to disappear.”
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