Professor Philip Lane:

I would not characterise it as a question of a recession versus not a recession, where a recession means growth tipping below zero. At a world level, the global population is continuing to grow. The IMF has often published projected growth figures of around 3.5% to 3.9%. The world economy needs to grow around that rate in order to avoid per capitareductions in income.

In Europe, there has been a significant reduction in growth this year but the European Central Bank has reasons to believe that the second half of this year will be better. First, the reduction in growth in 2018 was sufficiently unexpected that inventories built up. There was over-production which meant inventories built up and manufacturers may have slammed on the breaks a little to run those down. When inventories return to normal then production resumes. Second, the price of oil has fallen. In 2018 it was increasing quite a bit then it started to come down in the last months of the year. The price of oil is quite important across Europe because energy is such a large part of household and wider expenditure. It is good news for Europe that the price of oil is coming down. Third, fiscal policy is loosening. There are various plans this year for looser fiscal policy. There are some countries where that has not yet kicked in. Therefore there are factors which lead us to believe that the second half of the year will look better than what is going on now.

More broadly, globally, I am sure that the Deputy reads the same material as I do -----