History tends to repeat itself in advanced economies. Once again, growth ultimately fell short of expectations by only a small margin in the first half of 2026, despite the conflict in Iran. As early as 2025, the impact of tariffs was less severe than feared. This is a sign that structural factors (notably AI, defence and electrification) are underpinning growth in these countries and are expected to continue to do so in 2027. However, there are significant risks to the economic outlook, primarily of a geopolitical nature, with a significant upside risk to inflation and interest rates. The other instance of history repeating itself concerns a period that those under 20 cannot have experienced: the period leading up to the 2008 crisis, echoes of which can be seen in terms of growth, inflation, the direction of monetary policy, and long-term interest rates.
