The next financial crisis is coming ‘with a vengeance’, says the expert. But when?

There’s a passage in Philip Larkin’s All What Jazz, the collection of his writings as the Daily Telegraph’s jazz critic, that imagines his typical readers. Husbands of ‘ageing and bitter wives they first seduced to Artie Shaw’s “Begin the Beguine”’ who take comfort from collections of ‘scratched coverless 78s in the attic’, they are ‘men whose first coronary is coming like Christmas’. The same sense of gloomy inevitability often pervades the so-called ‘dismal science’ of economic commentary, amplified by political uncertainty and traumatic events: the one thing we know for certain is that economic life is cyclical and that any run of benign signals can only ever be temporary. It’s only a matter of when and in what form the next downturn comes upon us, and of taking what steps we can to soften its impact. This week Claudio Borio of the Bank for International Settlements — the central bank of central banks — encapsulated this foreboding with a phrase almost as resonant as Larkin’s. The end of the current global economic expansion, he said, may turn out to be very like a repeat of the last one, barely a decade ago: ‘a financial boom gone wrong… with a vengeance’.

Introducing the BIS’s annual report —which opens, it must be said, with upbeat talk of ‘near-term prospects the best in a long time’ — he was assessing a catalogue of threats to global growth. These include a rise in protectionism, particularly from the United States; a massive build-up of debt in China and other emerging markets, such as Thailand; the continuing uptick of inflation; and the difficulty faced by central banks of nudging interest rates back towards ‘normal’ levels without tipping borrowers into trouble, discouraging business investment and flattening consumer spending.

As a matter of when rather than if, the question to be applied to the UK economy must be how these factors will intersect with the timetable of Brexit.