Was 2007 really that bad?

As you may have noticed, there's plenty of doom and gloom in the business pages at the moment.

Last Updated: 31 Aug 2010

In fact, every paper we’ve picked up this morning has been full of bad news stories and dire predictions about what 2008 holds for the corporate world, after last year’s various credit market woes.

Now call us dewy-eyed optimists if you will, but we can’t help feeling that all this doom-mongering could turn out to be a bit overblown. After all, despite all the hand-wringing about the turmoil in 2007, the overall picture for the year wasn’t actually all that bad.

Stock markets may have bounced up and down a bit as the credit squeeze made its presence felt, but UK shares still ended the year up 5.4% overall, while the US market gained 4.1%. Emerging markets did better still: China, which this year raised more money in IPOs than London or New York for the first time ever, finished up an eye-watering 61% - and that was still less than Brazil, India and Turkey.

There are even some signs that the central banks’ plan to pump more money into the credit markets is starting to bear fruit – the rate at which banks will lend to each other has recently dropped below 6% for the first time in months.

Even the less-than-cheerful chappies at the CBI are warning that we shouldn't believe everything we read. 'It is important not to exaggerate the risks,' says director-general Richard Lambert is his New Year message. 'The most likely outcome for the UK is that the coming 12 months will bring a soft – as opposed to a hard – landing, after two years of above average-growth. If we allow ourselves to get carried away by today’s gloomy headlines, we could talk ourselves into something much worse'.

None of this will be much consolation to all those who have lost a fortune in the credit markets, or on falling banking stocks. But it might at least give the rest of us some cause for hope that our economy is not going to hell in a handcart...

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