As if the unrest and violence we have seen at home and abroad over recent days has not been enough to give cause for concern, savers will have woken this morning to grim headlines of stock markets plunging around the world.

The movement of major indices is of course an indication of how markets view the outlook for global economic conditions, which has been rocked by concerns the US may be heading for recession, amid concern over data on the jobs and manufacturing markets as well as disappointing results from the tech sector. The prospect of a wider regional conflict in the Middle East has also been stoking fears.

In the US, the talk has turned to the need for the Federal Reserve to cut interest rates to support to stave off recession, when previously a cut in borrowing rate would have been seen as a reason for cheer.

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Analysts said on Friday that they feared the Fed may have made a mistake by not cutting interest rates, and might now be too late to hold off a recession.

The Nikkei 225 lost 13% on Monday to hit a seven-month low, in a day of trading that was worse than at any time during the 2008 global financial crisis.

The Japanese benchmark index fell 4,451 points to 31,458 on Monday- its worst day since 1987.

London’s blue-chip index, meanwhile, plunged in early trading today after an expected global stock market rout started overnight. The FTSE 100 was 2.4% down after the open on Monday falling 193 points to 7,982, in its sharpest fall since July last year, although by 10.45am had recovered marginally to be down 185.47 at 7,989.24.

Market turmoil like this is naturally a big worry for people whose pensions are tied up in funds which track companies listed on stock markets such as the FTSE 100. But perhaps it would be wrong to get too worried about the global economy at this stage, which would seem to be the view of Michael Langham, economist at investment giant abrdn.

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“US recession fears are back as a dominant theme, driven by a combination of a rapid loss of momentum in the labour market and reports of soft consumer demand in earnings reports,” he said. “Market pricing is now indicating a belief that the Fed is behind the curve and will cut rapidly in upcoming meetings to avoid a hard landing. This has all spilled into Asian markets, with carry trades unwinding and risk-off sentiment prevalent.

“However, we think the macro backdrop isn’t as terminal as markets are indicating. Strong labour supply growth in recent years has helped to cool the labour market and layoffs remain low in the US. In Asia, the upturn in tech exports and still buoyant domestic demand shouldn’t set alarm bells ringing yet for policymakers.

“We expect the Fed to begin easing in September, which should provide the runway for cutting cycles in parts of emerging Asia, and likely further stimulus in China could also have some positive spill-overs, softening any slowdown in the region.”