Gordon Brown, 2005 edition: because of my changes, the UK can experience a fall in house prices without a recession, and grow faster than other countries even in tough times --
In each of the past three house price cycles - in the mid 1970s, in the early 1980s and again in the early to mid 1990s - a period of such rapid house price growth has been accompanied by a rapid rise in inflation and sharp increases in interest rates followed by sustained falls in real house prices, rising unemployment and recession. But it is because of the new framework for economic stability - with interest rates low and stable, inflation low and employment at record highs - that the economy is better placed to adjust to the moderation in the housing market. So that instead of the old British stop-go, house prices are adjusting free of recession ...
But no country can insulate itself from the ups and downs of the world economy. With European activity much lower and oil prices much higher, there has been an impact on growth right across the continent, including the UK. We will update our forecasts in the Pre-Budget Report. But while trends so far this year suggest the UK is likely to see growth at or slightly below our cautious view of trend it is because of the tough forward-looking decisions we have taken in monetary and fiscal policy that, even despite the new challenges we now face, Britain is continuing to grow faster this year than the other major European economies, all of whom are forecast to grow by less than 2 per cent with just 1.2 per cent growth in the euro area.
This was not the Gordon who made his G20 statement in the House of Commons yesterday.
UPDATE 17 DECEMBER: More Brown hubris from this era discussed (via Guido Fawkes).