The world is sliding towards another debt-ridden disaster, with the eurozone and China one shock away from a fresh crisis, according to a leading economics consultancy.
Fathom Consulting, which is run by former Bank of England economists, said current levels of low volatility masked systemic risks in the global financial system.
Danny Gabay, director of Fathom, said an oil price shock would be enough to trigger a “hard landing” in China as growth slowed, house prices plummeted and the country’s already huge amount of non-performing loans soared.
Mr Gabay drew parallels between China today and America in 2006, when a number of households began to default on their sub-prime mortgages but authorities played down the potential impact on the rest of the global economy.
