There is nothing like the seduction of a boom. The recent vigour of global economic growth is a siren song. By Inter­national Monetary Fund metrics, world gross domestic product growth prob­ably averaged 4.8 per cent over 2003-06, the strongest four years since the early 1970s. As tempting as it is to extra­polate this into the future, that may be a serious mistake. There is a much better chance that global growth has peaked and the boom is about to fizzle.

The world’s main growth engine, the US, is slowing. That is the verdict from the labour market, with job growth in the past four months running 35 per cent below average since early 2004. It is the verdict from the housing market, where an emerging downturn in residential construction activity is knocking at least 1 percentage point off the GDP growth trend of the past three years. And, notwithstanding July’s temporary bounce-back in retail sales, it is a message from the consumer, whose inflation-adjusted spending growth fell to 2.5 per cent in the spring period – one percentage point below the heady trend of the past decade.