Have we forgotten what economic stability feels like?

Panacea celebrated its 20th anniversary this year, and I’ve been part of the business for 15 of those years. During that time, I’ve worked closely with financial advisers, product providers and asset managers through some very different market conditions.

I’ve seen a few periods when businesses were confident, budgets were flowing and firms were willing to try something new. But more often than not, the instinct has been to hold back, preserve budgets and wait for a little more certainty.

Thinking about that recently made me wonder: when did we actually last have certainty? And when you look back, the answer is surprisingly difficult to find.

Period	What happened
2008–09	Global financial crisis – banking failures, recession and a major loss of confidence in the financial system.
2010–12	Eurozone debt crisis – concerns over sovereign debt and the future of the euro created further economic and market uncertainty just as recovery was beginning.
2013–15	Relative stability – one of the few sustained periods of stronger growth and relative economic calm since the financial crisis.
2016–19	Brexit – the referendum was followed by several years of political uncertainty and negotiations over the UK’s future relationship with Europe.
2020–21	Covid-19 – lockdowns, economic shutdowns and unprecedented government intervention, followed by global supply-chain disruption.
2021–23	Inflation and cost-of-living crisis – rapidly rising prices, initially driven by post-Covid pressures and subsequently intensified by soaring food and energy costs.
2022–present	War in Ukraine and geopolitical instability – Russia’s invasion added to energy and commodity pressures, while wider global tensions have continued.
2022–24	Interest-rate shock – the Bank of England raised rates rapidly to tackle inflation, substantially increasing borrowing and mortgage costs.
2025–present	Trade and tariff uncertainty – changes to US trade policy and tariffs have added another source of uncertainty for businesses and global markets.

When you put all of that together, something rather striking emerges. Someone who entered adulthood in 2008 is now in their mid-30s, yet they have never experienced a prolonged period of what previous generations might have regarded as economic normality.

It made me wonder whether living with this level of uncertainty for so long has changed the way we think about risk, investment and opportunity. But before considering that, I wanted to understand whether the years since 2008 really have been unusual, or whether history shows that periods like this are simply part of the economic cycle.

Was it always like this?

Going back over the previous century, there were clearly periods of upheaval on a scale thankfully far beyond anything we are experiencing today. But looking beyond individual events, an interesting pattern emerges, with extended periods of disruption interspersed with much longer stretches of relative stability.

• From 1914 to 1945, Britain lived through two world wars, the Great Depression and enormous economic and social disruption. 

• From 1945 until the early 1970s, Britain experienced a long period of relative economic stability, high employment and rising prosperity.

• That stability was disrupted during the 1970s and early 1980s by two major oil shocks – the first following the Yom Kippur War in 1973 and the second around the Iranian Revolution in 1979 – alongside high inflation, industrial unrest and recession.

• As the 1980s progressed, the economy began to recover and Britain entered a period of significant economic change, with falling inflation, financial liberalisation and stronger growth, but also high unemployment and major industrial restructuring.

• Financial services were changing too. The 1986 ‘Big Bang’ reforms transformed the City, increasing competition and accelerating financial liberalisation, while the Financial Services Act introduced a new statutory regulatory framework for the industry.

• By the late 1980s, a credit and property boom was gathering pace, eventually contributing to rising inflation, higher interest rates and another recession in the early 1990s.

• Following the turmoil surrounding sterling’s exit from the Exchange Rate Mechanism in 1992, Britain entered a remarkably different period. From around 1993 until the financial crisis in 2008, the UK experienced almost 15 years of continuous economic growth and relative stability.

So perhaps the unusual thing isn’t that economies experience crises. They always have. What stands out about the period since 2008 is how little breathing space there seems to have been between them.

And the 2008 crisis itself is an interesting example of what can happen after a prolonged period of confidence. Years of relatively benign economic conditions had been accompanied by expanding credit, greater leverage and increasingly complex financial products. When losses on US subprime mortgages began to expose vulnerabilities in the financial system, confidence evaporated remarkably quickly.

Panacea was still in its infancy at the time. Nearly two decades later, both the business and the financial services industry around it have lived through a very different economic environment.

Economies move in cycles – and perhaps confidence does too

Economic cycles are familiar enough: expansion, slowdown, recession and recovery. But underneath those movements sits something less measurable and arguably just as important – confidence. Caution can give way to optimism and sometimes complacency, until a shock sends us back towards caution again.

Economist Hyman Minsky famously captured one side of this with the observation that “stability is destabilising”: prolonged periods of stability can encourage progressively greater risk-taking precisely because people have become accustomed to things going well.

It’s an interesting concept when viewed through the lens of the years leading up to the 2008 financial crisis. But looking at what has happened since then raises an equally interesting question: if prolonged stability can eventually create too much confidence, can prolonged instability eventually create too much caution?

Nearly two decades of repeated economic shocks must surely leave their mark on the way people make decisions, and there are signs of that caution in the numbers too. 

In June 2025, the FCA reported that around seven million UK adults held £10,000 or more in cash savings and could potentially be missing out on the long-term benefits of investing. Among those with £10,000 or more in cash who hadn’t received financial advice, almost a quarter (24%) said they didn’t invest because they didn’t know enough about it, while 12% felt overwhelmed by the number of options available and 8% said they needed more support before investing.

Advisers will recognise some of that hesitation in clients who hold significant amounts of cash or delay investment decisions because they’re waiting for things to “settle down”. Asset managers see investors reluctant to commit, while providers see firms becoming increasingly selective about where they spend and invest. Businesses do much the same thing, postponing recruitment, investment or marketing because they want greater confidence about what happens next.

Each of those decisions can be perfectly rational in isolation. Collectively, however, they raise a more difficult question: have nearly two decades of uncertainty conditioned us to expect the next shock?

Are we waiting for certainty that doesn’t exist?

Perhaps we’ve started to think of certainty as a destination. Once inflation settles, once interest rates fall, once geopolitical tensions ease or trade disputes are resolved, then we’ll feel confident enough to make the decision.

History suggests, however, that there has rarely been a moment when all the risks simply disappeared. Even the periods we now look back on as stable contained political crises, wars, market corrections and uncertainty. What they do appear to have had was something slightly different: enough time without another major economic shock for people to regain confidence in the future.

That distinction matters because confidence doesn’t necessarily return simply because a crisis ends. It may only return after enough time has passed without another crisis beginning. After nearly two decades in which confidence has repeatedly been tested, perhaps we shouldn’t be surprised that households, investors and businesses remain cautious even when some of the economic indicators begin to improve.

For financial advisers, there is an interesting challenge in all of this. Helping clients understand and manage risk has always been part of the job, but there is an important difference between managing risk and attempting to avoid uncertainty altogether. Uncertainty isn’t an interruption to long-term investing; it is part of it.

The same principle applies to running a business. There will nearly always be a reason to delay an investment, postpone a hire or wait another six months before trying something new. 

Sometimes caution is entirely justified. But there comes a point when waiting for certainty stops being prudent and starts becoming a risk in itself.

Perhaps, then, the bigger question isn’t when stability will finally return. It’s whether the caution we’ve learned since 2008 is still protecting us from risk, or whether it is beginning to stop us taking the opportunities that ultimately help create the next period of growth.

What do you think?

Sarah Paul, Chief Operating Officer, Panacea Adviser