Professor Philip Lane:

There are concerns that China's economy is growing more slowly. That will always happen as it matures into a higher-income economy and moves away from manufacturing into services. In the USA, the fiscal stimulus is fading so that the very high growth rates last year will not be repeated this year and definitely will not be repeated in 2020 under current plans, with the fiscal policies tapering.

Generally, as the world's advanced economies go to lower unemployment rates, there is less room to grow. Essentially, the last ten years has been recovery from the crisis. It is easier to grow when there are spare resources which simply need to be brought back into activity. When unemployment in the USA hits just over 3%, productivity must take the lead. There is a wide range of views about the scope for that.

Is it the case that there will be a slowdown? Yes, however the scale of the slowdown remains open to question. Tipping from that to outright recession is less likely.

By the way, our researchers did some work on this and a recent publication from the Central Bank includes a recession probability calculator, which is at normal levels. Recessions do happen and while there is not an unusually high read from the indicator it is not the case that it is at a low level either. We do have to allow for the fact we have had a long expansion and the risk of the occasional recession must be part of how we run the economy in the coming years.