I have set out on a number of occasions my view that the economy is closing in on full employment and might be on the verge of overheating in the future. I have also tempered this view with the fact that an adverse shock to the economy such as a disorderly Brexit would rapidly change this assessment. This was reflected in the question the Deputy has just put to me. He acknowledged that there are signs of change as we get closer to seeing what Brexit will bring for all of us.
Our economy is in good condition. This is, perhaps, most evident in the fact that the unemployment rate is now just above 5%. More broadly, other indicators associated with overheating such as credit growth, the balance of payments, and consumer price inflation, are not suggestive of a trend towards overheating.
That being said, IFAC's heat map illustrating potential imbalances is a useful tool. However, before any of us can diagnose overheating in the economy, we need to be much clearer on to the deflationary and growth-slowing effects Brexit may yet bring about.