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Goldman Sachs forecasts UK recession in 2017, downgrades global growth forecasts

"First, the UK terms of trade are likely to deteriorate, especially if it becomes harder to export high-value added services (including financial services) to the European Union," the note said.

"Second, the uncertainty about the long term is likely to weigh on UK growth in the short term as firms hold off on investment...Third, outside the UK the main transmission channels are weaker UK demand for imports and—much more importantly—a tightening of financial conditions via a stronger exchange rate and lower risk asset prices."

"Further downward adjustments could become necessary if global financial markets deteriorate beyond the initial reaction, or if we see greater than expected political and economic contagion into other European countries"

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