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This dissertation has examined the impact that accounting earnings of the biggest companies in terms of market capitalization have on recessions in UK, in conjunction with other financial and macroeconomic variables: the yield curve, the Composite Leading Indicator, Gross Domestic Product and stock market volume volatility. The result obtained is that ftse 100 earnings are an efficient indicator both for current recessions or expansions and for periods of one and two quarters ahead in the future, when they are tested individually. Of course, as we move forward to the future, the variable’s performance gradually drops. When earnings are tested along with all the other variables in the same model, the models overperform and earnings do not lose their significance. In fact, when other explanatory variables are included, earnings are significant for three quarters ahead, as well. Regarding the models’ goodness of fit and their prediction efficiency, it seems that they perform pretty well. However, again, as the lags increase , the models’ efficiency declines. As far as the other variables used are concerned, it seems that the yield curve is statistically significant and a good indicator across all horizons, with a peak at the two - quarter - ahead estimation. Similar are the results for the Composite Leading Indicator. GDP is able to explain recessions only for the current period and has no predictive power and, finally, stock market volume volatility is not significant until it is combined with the other explanatory variables.