The so-called “Sahm rule” indicates that UK is seeing the sharpest rise in unemployment in the developed world, fueling recession fears that are growing by the day in London.

The closely watched rule in economic circles indicates the start of a recession when the three-month moving average of the unemployment rate rises by 0.5 percentage points or more relative to the low during the previous 12 months. The historical pattern was identified by US economist Claudia Sahm.

Retrospectively it has correctly signaled every recession in the US since the 1960s and also has a good record in the UK.

So now since hitting a near half-century low of 3.5% last year, unemployment in the UK has risen by 0.8 percentage points to 4.3%, pushing past the 0.5 point red line stipulated by the rule.

This leads experts to suggest that a new recession could hit just before Britons vote in the general election expected to be held next year.

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