Business Eye: Predictions for a new year

Alex Pratt
Alex Pratt

As we set off into a new year with our hopes and resolutions hopefully still intact, I thought I might offer up a few predictions for the year ahead.

As any politician will tell you, it is dangerous to be drawn on the hypothetical, but then a willingness to nail their colours to any mast is possibly why some of us have grown to distrust some of our elected representatives.

The backdrop against which these predictions of the future are made is pretty dark.

This year our Govt will have borrowed another £110 Billion and by 2018 Govt debt will have risen to be over £1.5 Trillion or around £65k per household.

This sits on top of record high private sector debts of similar amounts, plus huge public-pension liabilities, bank bail outs and off balance-sheet hidden debts like PFI commitments.

Even with interest rates at all-time lows and the “austerity approach” we are still spending more on debt repayments than on defence; a sobering thought when the Government’s primary concern is supposed to be our safety in a dangerous world.

Starting with the national picture, despite Alex “Braveheart” Salmond, the Scottish half of my family will not vote for independence.

In the end there are big economies of scale and Uncle Jimmy guards his wallet closely.

Moving to infrastructure, the Govt will fail to apply the brakes to the dangerous runaway HS2 train, despite the black hole in its economic case, and it will continue to avoid the urgently needed decision on air capacity at Heathrow.

The lights will flicker at least once as our power generating deficiencies start to bite.

The recent feel-good growth spurt will stutter before the end of the year when the Bank of England raises interest rates.

This current fragile “fools’ growth” is not yet founded on improved business investment and stronger international trade.

Pinewood Studios will be granted permission to bring more film production and over 3,000 new highly skilled jobs to Bucks, and despite fears to the contrary, building on this ex-landfill site adjacent to the M25 will not loosen the Greenbelt a notch.

The pressure for more efficient local government will intensify in favour of Unitary Councils.

Grants have been cut by up to 50% and services are being sliced. We can no longer justify five councils.

The price of Gold will be much higher than the current $1200/Oz by the year end.

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