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History is doomed to repetition

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A decade ago, the uk economy was heading towards what economists (and the government) believed (hoped) would be a 'soft landing' after the boom of the mid 1980s. Thing were off the boil, but few were predicting a prolonged slump; rather a slow-down to almost zero in the rate of economic growth, not a diminution in the size of the economy. Then something happened: German reunification. The decision to swap Ostmarks for Deutschmarks on a one-for-one basis (at least for the first 6000 per individual, two-for- one after that) set in train a massive spending boom accompanied by ominous inflationary trends in the German economy. The response, of course, was to raise interest rates. The effect for the Germans was initial new-found prosperity for half the country, then four million unemployed and, finally, the end of Chancellor Kohl's reign. The effect on the uk was a disastrous concomitant hike in interest rates just when we needed stability, and a plunge into serious recession. To cap it all, we then contrived to join the erm at the wrong time and at the wrong rate.

Today, one could gloomily point to parallels. Once again uk Ltd is said to be heading for a soft landing. Once again unexpected external events (economic collapse in the Far East and possibly South America) threaten international economic stability. All we need is for interest rates to double and exhortations to join the single currency in Euroland will reach their highest volume. History as farce rather than tragedy.

In short, these are uncertain times. Architects would do well to batten down the hatches of their businesses, and to prepare for clients to think longer and harder about when, where and why they should spend their money on building. Once again, it will be question of making the argument for value rather than simple cost, and for performance in use rather than initial expenditure. Better to say it now than later.

Paul Finch

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