China, meanwhile, has continued to grow, more or less in line with the objectives of the Chinese authorities. This is more moderate than the double-digit rates China recorded in earlier times. But it is still a robust performance and China is now a big economy whose performance matters for the rest of the world.
And because most people borrow to buy a house, housing is one area of the economy that is the fastest to react to tighter monetary policy. This tightening cycle, though, has been particularly steep. We have moved interest rates up quickly because history tells us that front-loading rate increases gives us the best chance to cool the economy quickly and keep inflation expectations anchored.