With the the recovery since 2010 maybe we are due a business cycle slowdown soon.
The UK is due an economic slowdown “soon” based on where it stands in cycle, a shadow Monetary Policy Committee member has warned.
Professor Trevor Williams, chairman of the Shadow Monetary Policy Committee toldthe Building Societies Association 2016 conference today thatLand Securities, the property developer and investment company, has been “smart” in divesting in property in preparation for a slowdown.
He said: “Business cycles being what they are - we have had eight business cycles since 1948 in the UK - with the the recovery since 2010 maybe we are due a business cycle slowdown soon.
“This may be why for instance Land Securities has divested some of its portfolio in anticipation of some kind of property slowdown - a smart move in my view.”
He added: “If you think about recessions associated with financial shocks, all of the analysis which has been done onwell over 100 shocks which have occurred to separate economies over the past 100 or so years shows that the average time you take to recover from a combination of an economic shock and a financial shock is eight to 10 years, which is pretty much where we are.”
Despite the warning Williams projected UK GDP growth of around 2% this year while he said the UK has outperformed its peer group in the EU since the recession.
In terms of economic output the UK is now 7.3% above the previous peak in Q1 2008 after growing by 1% per annum since then.
