Starmer’s speech this week wasn’t ‘big’ or radical. But it was interesting. A quick and only slightly unkind summary would go as follows: a Labour government would use public money and state power to do stuff that makes things a bit better, unlike those wicked Conservatives who would shut down hospitals and starve the poor. Clement Attlee was a bit dull too but he won the 1945 election so ignore all the media chatter about me being a bit meh, OK?

“Show, don’t tell” is good advice for journalists and politicians and when a politician ignores it, it’s worth paying attention. Starmer used his speech to tell us that British politics is approaching a “fork in the road” where the Labour and Conservative approaches on economic policy and the role of the state diverge sharply.  He then showed that in fact, the opposite is very likely to be the case.

Starmer’s hope is to frame politics as a choice between his own entirely respectable social democrat agenda of state power working in partnership with responsible business on one side and on the other, a Hayekian state-shrinking conservatism that dreams of Austerity 2.0 and de minimis public services:

“The truth is, whoever their Prime Minister is, the Conservatives simply don’t believe that it’s the role of government to tackle inequality or insecurity. They believe a good government is one that gets out of the way, rather than builds the path to a more secure future.”

To be fair to Starmer, there are indeed some Conservatives who do believe this. But there aren’t very many of them, and they really aren’t calling the shots in the Conservative Party right now.

Boris Johnson may well have libertarian inclinations, but he’s been willing to override them in the face of the pandemic, not least because he — eventually — accepted that lockdowns are quite popular. And, in any case, Johnsonian philosophy, such as it is, has never extended to economics: the PM doesn’t have any particular view of economic policy except as an extension of his political agenda.

Hence the Tory mayor of London who tried to protect black cabs against Uber. The Tory MP who said “fuck business” over Brexit. The Tory leader who said he’d spend billions more on the NHS instead of cutting corporation tax. And hence the Tory PM who has not hesitated to oversee the biggest expansion of state spending and borrowing in peacetime in response to the pandemic, and who has no particular interest in doing much to unwind that expansion, since that would mean tax rises or spending cuts or both.

Nor does he face much pressure from others to do such things; quite the contrary. At the level of international economics, the consensus view of post-pandemic policy has shifted quite remarkably since the global financial crisis. Economists and market actors who used to demand budget-balancing fiscal discipline are now deeply relaxed about states borrowing to support demand and fund infrastructure. That’s in large part due to central banks, of which more later.

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Can Labour be saved from the hard Left?

By James Bloodworth

Domestically, Tory budget hawks are pretty rare birds these days. Yes, Rishi Sunak drops hints at wanting a slightly more restrained approach than the PM, but that’s basically the job of anyone overseeing the Treasury and in any case it’s all relative. Signalling that you’re more fiscally conservative than Boris Johnson is like saying you swear less than Gordon Ramsay. If you want an illustration of how the centre of fiscal gravity has shifted among Conservatives, consider the ongoing Cabinet row over Universal Credit: Tory doves want a permanent increase of £1,000 a year; hawks want short-term increases worth hundreds of pounds. Osborne-era cuts in welfare are off the Tory table.

Which brings us back to the political problem for Keir Starmer’s modest, sensible speech. The perfectly sensible economic approach he outlines will only offer a “fork in the road” contrast with the Tory stance if that Tory stance changes dramatically in the next couple of years. In effect, Starmer is betting on his opponents doing what he wants them to.

I suppose that’s not impossible. Perhaps Sunak will somehow replace Johnson and turn out to be a true neo-Thatcherite who subcontracts economic policy to the Institute of Economic Affairs. But that’s an extremely unlikely scenario, to put it politely; far more likely is that Johnsonian politics continues to trump economic conservatism and the Tories go on spending on stuff they think will let them hang on to enough of the voters they won from Labour in 2019.

Which brings us to the first of those c-words — consensus. And it twins with another: Clem. It makes good headline sense for Starmer to evoke Attlee, given he’s the man some in the media think we need, and a good foil to Johnson’s Churchillian fantasy. But the parallel doesn’t really hold.

Clement Attlee’s 1945-51 governments might have helped establish what eventually became a sort of post-war consensus on economics and the state, but the Attlee reforms began in contention, not consensus. His big domestic calls — the Beveridge welfare state and the NHS — were initially opposed by the Conservatives, who only regained power after they accepted those reforms. So, if Starmer is Attlee, as he claims, what are the transformative, mould-breaking changes he wants that his opponents reject?

Even allowing for Starmer’s prudent reluctance to reveal much of a policy agenda so early in the game, there is no reason to think that he is a man who will oversee and implement an era-defining transformation of state and the public realm. When you see children’s “Thank you NHS” posters in front windows, you realise we live in a word Attlee’s governments helped design. Starmer is a clever man with good policy advisers, but even his greatest admirers would struggle to suggest he has an agenda for changes that will still stand tall in British life in 70 years’ time.

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Would Jeremy Hunt have done better?

By James Kirkup

A better post-war text for Starmer’s approach is in the continuity of economic policy that began under Atlee’s last chancellor, Hugh Gaitskell in 1950 and persisted under the Tories’ Rab Butler from 1951. The postwar consensus of “Butskellism” can be overstated, but for at least two decades after Attlee, there was little serious disagreement between Labour and Conservatives about how economic policy should work and the ends it should seek. Today, we live in another period of consensus, even though it is rarely acknowledged as such.

The unspoken truth is that Labour and the Conservatives today already largely agree about economics and — at least as important — how economic policy should be done. Since Tony Blair and Gordon Brown took power in 1997, UK economic policy has operated within rules they established. Politicians tax and spend as much as they think voters and the gilt markets will tolerate, under largely cosmetic fiscal “rules” conjured up and then broken according to the politics of the day.

Meanwhile, the Bank of England sets monetary policy and — sometimes — worries about inflation to provide real assurance to the markets. And in times of crisis, it is the Bank that provides the most important support for demand, even though stimulating demand is a deeply political business with the sort of distributional consequences that are more commonly made by elected leaders, not officials.

That policy framework, largely replicated in other advanced economies, has created the conditions that allow Boris Johnson to spend like a sailor in port, and all with the blessing of the IMF. Independent central banks have now spent more than a decade pumping new money into credit markets, pushing down borrowing costs and making it almost free for governments to borrow, borrow, borrow. To be clear, the Bank of England hasn’t deployed “extraordinary” monetary policy with the aim of supporting Government borrowing, but that policy has had that effect nontheless.

The economic case may be sound, but the political implications of quantitative easing are huge. Cheap money inflates asset prices, including housing, benefitting older property-owners and screwing asset-poor youngsters. It helps pump up equity prices — because money has to go somewhere — and arms private equity with barrels of “dry powder” to spend buying up companies and transforming the corporate landscape.

A Labour Party that wanted to offer a real economic alternative, a true fork in the road, would challenge that policy framework, look again at BoE independence and the role of QE. That’s what John McDonnell wanted, you might recall. But his successor as shadow chancellor, Annaliese Dodds, has made clear that while she’s aware of the side-effects of QE, Starmer’s Labour will defend the post-97 policy framework to the hilt: central bank independence will be the foundation of Starmer’s economics. As for fiscal policy, Labour would conjure up another set of rules “targeting a balanced budget over the cycle but still allowing for flexibility in times of crisis and for productivity-enhancing investment”. Which would sound familiar to a decade of Tory chancellors.

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Dodds set that out in her Mais Lecture last month, a speech that got less attention than Starmer’s but which is essential to understanding the current Labour position. That position, made clear across the two texts, is that Labour wouldn’t do things differently but it would do them better. Industrial strategy. Regional policy. Supporting skills and investment.  Saying nice things about small business. Agreeing that inequality is bad and should be reduced. The Labour agenda boils down to promising much the same as the Conservatives with better implementation and better results.

Which brings us to competence, and compassion. Accepting an economic consensus cuts down Labour’s options for attacking the Conservatives. It is banal for an Opposition to accuse an incumbent government of not doing enough to fix the problems of the nation: that is dog-bites-man politics that sways no-one’s vote. So Labour can only offer greater competence and greater compassion.

The first is simple to describe and near-impossible to deliver. How do you show people you can govern well when you’re not in government? Blair and (almost) David Cameron managed to convince the electorate they could run the country well despite a total lack of experience, but in both cases they were helped by incumbents who were (harshly) seen to have overseen catastrophes of incompetence: Black Wednesday and the credit crunch.

And while it’s still very early in the political story of Covid-19, voters are so far showing few signs of penalising Boris Johnson for his errors over the pandemic. Current polls show the Tories edging ahead of Labour and Johnson’s approval ratings now higher than when he entered No 10 in 2019. Embracing lockdown caution and the stunning competence of the vaccine rollout mean it’s possible that the PM who oversaw more than 100,000 Covid deaths might not pay a major political price.

Of course, that could change. Most voters don’t currently see the pandemic as a political event and they’re not really thinking about an election that’s still nearly four years away. Perhaps the slew of inquiries that must follow the outbreak will reveal culpable failures by Johnson and his party. But betting the 2024 election on a public inquiry isn’t a coherent strategy for Labour. And remember those predictions about how the deadly mismanagement of the Iraq War in 2003 would doom Blair in 2005?

Starmer’s other route will be the familiar Labour promise of compassion: trust us to do things better than the Tories because we’re nicer and we care more about you and your family. Again, there are limits to how effective this will be against Johnson. First, it’s another dog-bites-man political cliché: every Labour election campaign in modern times has come down to promising to protect the NHS from wicked Tories. Even if voters hadn’t heard that line before, this time they may well be offered the chance to vote for wicked Tories who have showered the NHS in record-breaking sums of (borrowed) money. Compassion may still favour Labour, but it won’t be enough.

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Does Labour understand why it lost?

By Graeme Archer

And so to culture, then. When there is no significant political division about economics, what’s left to fight about? Values, worldviews, social issues, and who understands and likes the country best. Both the 2016 referendum and the 2019 general election proved that for some voters at least, culture and values trump economics. Some people voted Brexit aware that it might mean foregoing some national wealth; similar imperatives helped turn bits of the Red Wall blue for Boris.

Johnson’s Conservatives understand that, which is why they’ve largely ditched fiscal conservatism and decided to forget the history of Margaret Thatcher signing the Single European Act and promoting the Single Market. Instead of the “markets uber alles” approach that Starmer now alleges, Johnsonian Tories  make a hard-edged cultural appeal to people who used to vote Labour by instinct and tradition. Thatcher won over working-class Labour people by promising to make them richer. Johnson’s offer is less about wealth than freedom: a sovereign nation you can be proud of again. For some people, the nation’s precise GDP matters less than the flag that flies above it.

This is why it’s sensible for Starmer to try to talk up his economic differences with the Conservatives, because focusing on the truth — that those disagreements are fairly minor — inevitably shifts the conversation to cultural dividing lines. As leader, he’s been very adept at sidestepping Conservative elephant traps that would force him to take a position on “woke” issues such as trans rights and free speech, which are of only minor importance to most voters. But some in his party are quite keen to fight over such things and every time a Labour MP joins the debate about pulling down statues or decolonising the curriculum or using the right pronouns, a small cheer goes around Conservative HQ. Witness the Labour “backlash” when some second-tier advisers suggested that the Labour Party might want to show voters that it — gasp — actually likes Britain and understands why some voters like the Union flag and being British.

Politics-as-culture-war is a battle that many (though not all) Conservatives would relish far more than Starmer would. Tory strategists see the image of Woke Labour led by an Islington lawyer as the best way to stop those Red Wall folk taking back the voters they lent Johnson in 2019. If Starmer’s consensual approach to economics succeeds in neutralising the issue as an attack line for the next election, you can look forward to Tories deploying ever more culture-war wedge issues in the hope of forcing Starmer to choose between the values of his progressive colleagues and the worldview of voters who want politicians to talk about jobs and hospitals and schools, not undergraduate debating points about “social justice”.

Keir Starmer is currently experiencing the downswing of a political pendulum that’s been accelerated by social media and our ever-shorter attention spans. For as long as I’ve been writing about politics, the media-political village has had a tendency to divide politicians into triumphant victors and dismal failures, with no room for shades of grey in between. But in a discourse made jittery by Twitter-immediacy, the jumps from one extreme to the other quicker and more jarring.  A couple of weeks ago, my former colleague Stephen Bush wrote a smart and nuanced piece that included balanced reporting of some Labour discontent with Starmer; yet for all Stephen’s nuance and balance, within a few hours, the SW1A village had settled on a new consensus that Starmer is a duffer doomed to fail.

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Will Labour ever repent?

By Paul Embery

Before we reach that far-off next election, the Labour leader will see some highs and more lows too; I suspect he’s calm enough to treat those two imposters much the same. I also suspect that absent a huge change in the politics of Scotland, he’ll struggle mightily to secure a Labour majority at that election.

But ultimately, I’m less interested in the fate of Starmer – or Johnson – than in what their approaches to economics reveal about politics and policy today. The last few years have seen a lot of people talking about the death of our fifth c-word, centrism, cheering as consensual technocrats lose out to ideologues who supposedly have a better understanding of what The People want. But that narrative, like most, has been over-done. Between them, Boris Johnson and Keir Starmer are tacitly agreeing a modest, technocratic consensus over UK economic policy after the pandemic. What Works is quietly reasserting its dominance over the Will of the People.

At least on economics, they aren’t so much Churchill and Attlee as Butler and Gaitskell. Shall we call it Johnmerism or Starmsonism? Take your pick, but I’m happy to go with Centrism 2.0 — and a country tired of politics as demented soap opera will be too.

The problem was that Cable, who later became an interesting Cabinet minister then a poor Lib Dem leader, struggled to connect his economic insights to practical politics. The ever-smaller band of hacks attending used to leave that room each week wondering what his seminars had to do with the Blair government, the Lib Dems’ prospects, or anything else that was then on the agenda at Westminster.

Those Commons sessions — erudite, informative, almost devoid of politics — came to mind while I read Cable’s latest book. Money and Power is good and interesting, but fails utterly to deliver on one of its key promises. The book is 16 portraits of world leaders who made a real economic impact, and if you’re looking for a brisk, slightly old-fashioned “great man” primer on modern economic history, pre-order it today. But if you’re taken by the publisher’s promise of a book “examining the fascinating interplay of economics and politics”, prepare for disappointment.

Because this is economics largely estranged from — and sometimes wholly divorced from — politics. Time and again, the matter of whether and why economic policies and their authors are approved or rejected by their populations is an afterthought, treated like a weather event: something that just happens. And in his intelligent but bloodless way, Cable unwittingly says quite a lot about what can go wrong with economic policymaking. By omission, he points towards some things that the next generation of economically-interested politicians should be thinking hard about now.

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Maybe the first and biggest question is: how important should economic policy be to politicians? Cable quite rightly notes that for most of the post-war period, countries around the world have given national priority to rising living standards and economic wellbeing. He goes on to describe how a variety of leaders have sought to do that, with varying degrees of success. Cable’s measure of success for the politicians he profiles is largely based on economic outcomes: did they deliver more wealth and wellbeing for their populations?

The importance of that barely needs to be explained: sustained economic growth in recent decades has transformed human experience in ways that were barely conceivable even a generation ago. Infant mortality has plummeted, lifespans are soaring, and the years of life we have are happier and healthier than ever before.

But is that enough? And is the pursuit of growth above all always the right thing for politics to do? Cable’s economic policymakers often come across almost as Platonic guardians, distant and superior beings making decisions about the best interests of the masses who will eventually benefit, whether they know it or not and whether they welcome it or not. One of Cable’s most revealing observations is about Margaret Thatcher: “One of her traits — and an admirable one — was to introduce and persist with measures that she knew to be unpopular but judged to be necessary.”

In this book, elections, opinion and consent are peripheral; where Cable says “politics”, he often means a leader’s ascent through the hierarchy of a party, not anything directly involving the people who feel the results of economic policies. His depiction of Ludwig Erhard, father of social market economics, is crisp, informative and challenging (I speak as Director of the Social Market Foundation) but says almost nothing about post-war politics in West Germany. He writes about Franklin D Roosevelt’s success in establishing a generation-long post-war consensus around a “strong, active federal US government, labour rights and social protection”, but he does so in a single paragraph and offers no explanation of how FDR turned economic success into political wins.

And as Cable acknowledges — but cannot explain — there is no certainty that good economics is also good politics. He profiles Leszek Balcerowicz, Poland’s finance minister at the fall of communism: his “Big Bang” liberalisation of the Polish economy put the country on track for years of strong growth and, eventually, EU membership. But Balcerowicz lasted barely two years, as Poles rejected him and his allies. By contrast, Cable notes that Peronism in Argentina “has combined one of the most abject, sustained failures in economic policy with continued political popularity, evidenced by the 2019 election of a sixth Peronist president”.

What makes the difference? Cable doesn’t know and doesn’t really try to answer. His puzzlement over voters’ curious choices is evident in his last and probably unwise profile, of Donald Trump, which appears to have been hastily finished in the strange days following the November election.

Trump’s eclectic but not haphazard approach to economics perplexes Cable (and others), who cannot understand how Reaganomic tax-cuts could sit with a fixation on protectionist bilateral trade policy and nostalgia for inefficient manufacturing — and command the support of a large section of the American electorate.

All of which leads to one of the questions Cable doesn’t ask, but which emerges clearly on reading his book: what happens to economic policy when people decide there are more important things in life than economics?

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To be fair to Cable, he’s hardly alone in this. All sorts of people — politicians, journalists, academics — have been keen to try to explain the politics of recent years in solely economic terms. Trump won in 2016 because white non-college incomes fell and jobs disappeared; Britain voted Brexit because of austerity.

And economics may have been one factor for some voters. But that economics-first view overlooks other things, the cultural and the social, which some people consider more valuable than GDP growth. Philip Hammond used to say that none of the 17.4 million who backed Brexit voted to be poorer, but some of them did. Some were quite happy to forego some portion of future economic growth in exchange for what they saw as sovereignty, national pride, a sense of control.

That’s not a choice I’d have made, but I think people who make policy need to accept it as a valid choice. They also need to think more about why some people feel able and compelled to make such choices: free trade made America richer in aggregate, but didn’t benefit everyone, or make everyone feel happier about themselves or their country. Economic policy should acknowledge such perceptions and experiences and reflect them more, rather than — as Cable’s analysis sometimes seems to imply — regarding voters’ irrationality as an inconvenient obstacle to be overcome or just avoided.

Here, I should note that I have a lot of sympathy for Cable’s Platonic view of policymaking: both as a columnist and a think-tanker, I’ve often argued for politicians to do unpopular-but-sensible things. (And I still do: the sooner we start taxing housing assets to fund social care the better.) But my guess is that it’s going to become even less viable to make economic policy by doing complicated and contentious things for the greater good of the electorate in the hope of securing their weary consent later. I suspect electorates empowered and (sometimes) informed by social media and possessing a very(historically speaking) high level of wealth and comfort are only going to expect more from their leaders than sound economic management.

My bet is that sooner or later, that’s going to mean people in politics start talking a lot more about central banks. A conversation about their role in modern economics — and politics — is surely overdue. Our elected leaders have handed vast power to technocrats whose legal mission is to do what’s best for the masses, not what they want. There’s nothing wrong with this — it’s better than the alternatives — but where’s the political process to deliver consent? The economic guardians of monetary policy routinely make decisions with profound political consequences: ultra-low interest rates and quantitative easing are effectively transferring great wealth to older property-owners, at the expense of younger people struggling to buy a home and amass decent pension. Yet in the UK at least, politicians barely talk about any of this. In QE, economics trumps politics to such an extent that politics is barely present.

That cannot last. Cable several times cites Bill Clinton’s campaign slogan — It’s the economy stupid — as a truism that explains all politics. Not anymore.

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There’s another even deeper canyon on the politics-economics faultline that Cable highlights without apparently noticing. Can economics be used to suppress politics? Can you provide enough wealth to buy your way out of the political need to win arguments and elections? These questions arise in Cable’s analysis of east Asian leaders, in which he has disappointingly little to say about political freedom.

His portrait of Lee Kwan Yew, for instance, has more to say about the academic background of Lee’s economic advisers than about the people of Singapore and their view of a leader who delivered economic growth and an increasingly authoritarian state.

And then there’s China, which is posing one of the biggest questions of all about politics and economics. Is it possible to make a country and a people rich without making them free? Our entire idea of the West is premised on the assumption that economic growth and political freedoms proceed together: as people own more stuff, they demand and acquire legal rights over that stuff, and in due course a say in how those laws are made. Educated, property-owning masses cannot be denied political freedom forever, we trust.

China is doing a depressingly good job of proving us wrong on that. The CCP’s embrace of the market has made many of its people — by global and historical standards — rich. Hundreds of millions of Chinese people have smartphones and flatscreen TVs, but not one of them has a vote. Effective economic policy is trumping politics.

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This is the stuff I’d like to read about in a book that offers to guide our understanding of the future relationship between politics and economics. Sadly Cable barely touches on this and his book sometimes goes beyond being simply apolitical and borders on the amoral. His chapter on Deng Xiaoping treats Deng’s role in Mao’s mass murder of their countrymen — and direct responsibility for the Tiananmen Square massacre — as mere factual context for the man’s views on markets, industrialisation and agricultural reform.

The results are jarring, especially when Cable writes blandly about the catastrophic Great Leap Forward, when private farming was banned and crops seized by the state. This horror took place when Deng was one of the three men running China, yet Cable presents it as little more than a bump in the road to economic success:

 “…countless millions died in the famine: 45 million according to some Western sources; 16-17 million on Chinese official estimates. It was an epic disaster which appears to have persuaded Deng (working with like-minded senior leaders) to press for ‘adjustments’: radical economic changes designed to raise living standards.”

After all, what other response could a good economic policymaker have to helping cause the worst famine in human history than to seek to raise living standards for those still living? Deng may have been, in Cable’s phrase, an effective economic architect, but he was a gravedigger too. Shrugging off a state’s murder of its own people because it made the ones it didn’t kill richer is the logical, dismal conclusion of a worldview that accords economics priority over politics.

But then, having snatched control of the global economy from the drunk drivers in Wall Street and the City, international leaders handed it back – without addressing the roots of the crisis. Unsurprisingly, we are once again seeing the same conditions which precipitated the crash the first time around.

Here are four reasons to be worried:

1. The Banks are even bigger

In 2009, former Chair of the Federal Reserve Alan Greenspan pointed out that if banks are “too big to fail, they’re too big” – a lesson that should have been obvious from the massive bail outs. Yet in the years since the crash the sector has grown even more concentrated. Just six banks now manage half of the assets of the entire banking industry. To take just one example, JPMorgan has amassed a huge $2.56 trillion in assets, nearly double what it had at the end of 2006. The ‘moral hazard’ is obvious: banks which are ‘too-big-to-fail’ can seek high-risk, high-return strategies in the knowledge that the government will have to rescue them in times of crises.

2. The regulations are getting weaker

In the wake of the crash, politicians and pundits promised tighter regulation to prevent future crises. Democrats in America pushed through the Dodd-Frank Act in 2010, introducing mandatory stress tests and significant capital requirements for all big banks. In the eight years since, the sector’s formidable lobbying power has been employed to water down these reforms. A record $2 billion was spent by Wall Street on the 2016 US election cycle, and earlier this year, the largest two banking lobby groups – including 48 of the largest banks – combined to create the Bank Policy Institute to lobby the Trump administration for a roll-back of regulations. Just this week the Wall Street Journal revealed that the Federal Reserve was considering redefining the definition of a ‘big bank’ in order to lower regulatory costs for more regional financial institutions.

3. The debt is riskier

A decade of loose monetary policy has seen excessive risk spread outside the banking sector, with the share of corporate bonds with a BBB rating (one above junk) reaching nearly 50% in both US and Euro Areas, significantly higher than the pre-crisis peak. Corporate bonds, debts securities used by companies to raise finance, make attractive investments because of the high-yields they offer; but they do so precisely because they are very risky. One of the major causes of the last crash was the highly rated bonds that turned out to be riskier than advertised. But even if bonds are correctly classified, if low-rated bonds make up too much of the market, the risk of crisis in the event of a slump is heightened.

4. Consumers keep borrowing

Consumers, too, have been making the most of loose credit. Concerns have already been raised about unsustainable borrowing in the auto finance industry, from which UK households borrowed almost £32 billion in 2016. These finance arrangements allow people to acquire a vehicle for a period, paying monthly fees, before handing it back, trading it, or buying it outright. Lenders make these loans on the hope that the resale value of the car will rise against estimates, should consumers decide to return the vehicle. The industry claims that it is secure: sub-prime consumers only account for 3% of the market and data from the second-hand market allows them to calculate the value of depreciation on a car to within a few pounds. Supposedly, this prevents them from under-pricing loans and finding themselves stuck with a fleet of cars worth little more than scrap.

But there is reason to be sceptical. The credit-scoring policies used remain secret in the UK, and let’s not forget, Wall Street and the City – on the back of complex mathematical modelling – assured us of the safety of their new financial products before they imploded. An economic downturn could lower demand for used cars at the same time as reducing the ability of consumers across the country to meet the terms of their deals. Particularly worrying, almost half of Britons who have taken out car finance deals confess that they don’t understand the small print of their own deals.

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More generally, household debt in the US is at an all-time high of $13.2 trillion. This may have been sustainable through the long era of low interest rates – 2018 was the first year that rates rose above 0.5% since 2008 – but as rates rise consumers may struggle to meet debt obligations. That could be all the shock required to start another negative spiral.

If Morgan Stanley are to be believed, there’s a recession coming around 2020 – there’s no way of knowing if it will cause damage on the scale of 2008, but as these four risks show, we’re not much less vulnerable. The global response to 2008 was to put the pre-2008 world on life support, rather than deal with the fundamental structural problems that led to the crash. This time around, those short-term fixes might not be available – in 2009, central banks had the headroom to cut interest rates, but today rates are still rock bottom – and with international leaders locking horns over tariffs and Syria, the prospects for global action are even gloomier.

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