WHAT HAS HAPPENED TO THE CYCLE?

The Chancellor reminded us in his Budget speech that "the British economy is now embarking on its seventh successive year of steady growth, at an average rate of getting on for 3 per cent a year". This experience contrasts markedly with that of the 1970s and is dissimilar from that of the 1960s. Here we examine the recent behaviour of the economy, particularly with regard to the cycle. We conclude that the cycle is not dead and that since the trough of 1981 the economy has passed through two further turning points. If a correction is made for the miners' strike, activity peaked in late 1984, reached a trough in 1985 and is currently once more growing at an above-trend rate.