Still, the overall trend in the financial markets over the past several months clearly indicates that market participants have a cautious outlook on the economy, as shown by the slowdown in growth or even a decline in stock prices since autumn 1996, and by the concurrent decline in long-term interest rates.
The collapse of the housing market over the following years was at the centre of the recession and the unwinding of economic imbalances. The level of annual housing output has fallen by around 90 per cent from peak (Chart 6), with output now little greater than the estimated depreciation rate of the housing stock.