Barclays Wealth is a private UK-based wealth management firm that handles some $231 billion in client assets. Earlier this month Barclays’ Chief Economist Michael Dicks set the chances of a UK “double dip” recession at 1 in 3, saying:

All in all, we would say that it is more likely than not that the fiscal tightening takes the edge off of the recovery, rather than completely wrecking it. But, a double-dip scenario certainly cannot be completely ruled out.

Today Barclays is in the news again due to a reduction in its estimate for gains in the S&P 500 this year. Although still predicting that the S&P will end the year in the neighborhood of 1,110 (an increase of 4.2 percent from last Friday’s close), this is 9.8 percent lower than earlier predictions.

“The probability of something really horrible happening has risen,” Dicks said in a press briefing in London today. “With growth in both the U.S. and Asia set to slow in the second half of the year, fears may rise. Expectations could remain polarized between either a stock market boom or a deflationary bust.”

Dicks is more pessimistic than most economists, citing continued risks to growth in either the US or China, falling US consumer confidence, China’s failure to hit the GDP growth forecast, and the threat to the European union:

As European governments slash their budget deficits, gross domestic product in the 16-nation euro region may fall and monetary union may “break up entirely,” adding to uncertainty in equity markets, according to Dicks.

A jobless recovery and even that seems to be at risk. The lesson is to keep your money at work in the stock market, but hedge your bets and be ready to cash out if, as Dicks says, “something really horrible” happens.

You can follow Michael Dicks on his blog.

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