After a decade of nearly unparalled year on year growth in the UK and across the global economy, the last 12 months has witnessed the credit crunch, a housing crisis, rising consumer prices, and talk of the potentially damaging consequences of a global slowdown on the employment market.
The sub-prime mortgage crisis and ensuing credit-crunch, which began last summer, have had strong repercussion across the global economy, starting with the financial sector in the US and gradually seeping into other industries and countries.
The expectation of plenty...
The late 1990's and the start of the current decade saw immense economic prosperity: a global bull market fuelled by multiple factors: the advancement of technology making global trade quicker and more efficient than ever before; a financial sector which has become fully globalised; and the rise of emerging economies such as China and Brazil.
The result of this boom, however, has been a glut of over-confidence.
Linked to this over-confidence has been an excess of available credit and over-borrowing both on an institutional and a private level. Up until last summer private equity groups were able to leverage their investments by up to ten times such was the willingness in the market to offer credit to investors.
We have been riding an economic bubble which according to many economists has been set to burst for some time- the only question was when.
Whether or not we will truly enter a recession, if we have not done so already, however, is the subject of much debate.
Technically speaking, a recession is cased a significant decline in economic activity lasting more than a few months
In the US this may well already be taking place.
Speaking in April, Ben Bernanke, chairman of the Federal Reserve, admitted that the US may already be in a recession with economic growth in the last quarter having trickled to less than 1%.
More worryingly, the US is already experiencing a slowdown in its employment sector which economists often look to as a definitive sign of an economic downturn.
Latest figures show that job cuts in the States are at their highest for five years with the construction and manufacturing sectors - the hub of the economy-being hit the hardest.
Unemployment rates rose by a third of percent in March alone which, despite not sounding particularly high, is a massive rise for a country the size of the United States.
Calm after the storm?
The current situation may not be as drastic as the newspapers would have us believe, however. Many economists go as far as viewing recession as part of a natural economic cycle with a phase of slow growth acting as a necessary cooling off period after an intense spate of economic growth, allowing the economy to readjust to a sustainable level.
According to some this readjustment is already taking place. Taking confidence from a rise in equity markets in the US and Europe, US Treasury secretary Hank Paulson, recently announced that the worst of the credit crisis had passed - good news indeed for jobs seekers.
Despite the claims that the global credit crisis has reached its nadir and is on the rebound, however, it is unlikely that the economic instability will stop here.
Such optimism is not shared by all, with Robin Geffen, chief executive of Neptune one of many fund managers in the city expectant of further write-downs and turmoil.
The sub-prime crisis which has so far cost US banks $170bn in write downs, is predicted by the IMF to ultimately cost the sector a total figure of $1 trillion. HSBC is the latest bank to reveal substantial losses, recently announcing sub-prime write-downs of $5.8bn.
Despite increasing pockets of optimism it is possible that things will continue to get worse before they get any better.
Recession, what recession?
Meanwhile, throughout the rest of the globe, talk of a global slowdown has been less fervent. Though growth in many developing economies has suffered to a degree from the events in the West, emerging power-houses such as China and India are still experiencing GDP growth into double figures with no signs of slowing down in the immediate future.
Whereas in the past these countries have proved susceptible to the economic climate of the West - particularly that of the United States which has traditionally served as the largest importer of commodities and manufactured goods from the developing world - there are signs that many of these emerging economies have gone a long way in decoupling- a term used to describe the process of emerging economies becoming self-sustaining, unfastening themselves from the US economy.
Back on British shores a series of interest cuts by the Bank of England have gone some way to boosting investor confidence with the Chancellor, Alistair Darling predicting that levels of economic growth will remain over 2% for 2008, only marginally slightly below the level of growth experienced over last year.
Yet there are increasing signs that despite growing optimism from some areas we are by no means out of the woods, particularly as far as the financial sector is concerned.
Research shows that the number of jobs available within the financial services industry is 23% lower than at the same point last year.
More job cuts are expected to add to those already experienced in several banks with RBS recently announcing that it is set to cull 200 employees from its investment banking arm.
The future's bright, the future's...?
How long the current downturn will last is anyone's guess.
In spite of rising optimism form some quarters that we are coming to the end of the current economic turmoil the IMF predicts economic growth of only 1.6% in the United Kingdom for 2008 and the year after, not horrific, but far from reassuring. Even the most experienced economists are wary of predicting what will happen much beyond that.
For those entering the world of work for the first time this isn't immediately encouraging news. There is no need to panic - employment levels are so far remaining strong across the economy as a whole with only those areas directly hit by the credit crunch, namely the investment banking sector and the real estate industry, showing signs of job-cutting.
Even in these areas the affect has been relatively minimal to date. With uncertainty still very much the order of the day, however, you may want to rethink that gap-year and begin job hunting whilst the picture still looks reasonably rosy, or if you are determined to book your round-the -world ticket you might want to extend your travels by an extra year. Or two...