Monday, 31 December 2007
Lots of people have their predictions for 2008, here are mine (CU that is, Nick Drew is adding his in the comments). After my success of last year and more recently I hope to continue the winning streak, not that this has made me any money, yet.
As an aside I will count this as part of Dizzy's meme; 8 for 2008 -
1. The FTSE will suffer a very eventful year, and may well be down quite considerably by the summer, but for a variety of reasons, including a re-bound in bank shares will end the year in the 6000's just as now.
2. On the currency front, after last year's excesses the pound will have a much more challenging year, especially as rates in the UK head for parity with Europe. As a result it will be more like 1.80 to the dollar and 0.70 against the Euro by mid-year. I don;t think you can predict currencies much beyond that. The oil majors will be the big spenders in terms of mergers and acquisitions.
3. Politically in the UK, there will be no election and Gordon Brown will still, unfortunately, be Prime Minister this time next year.
4. The UK Housing Market will slow much faster than most economists are predicting and the overall rate might touch 20% by the year end. Those viewing the market are not factoring in the role of psychology enough into the falling market. My friends who are estate agents reckon they will all have closed within 3 months - so things are looking pretty bleak.
5. Barak Obama will win the Democratic nomination for President and then go on to be elected as the 44th President of the USA.
6. Northern Rock will be nationalised (officially, it already is in many ways) as ways to try and get a private buyer founder. This will be the biggest government crisis and will cost Alistair Darling his job as Chancellor in 2008.
7. The credit crunch will continue long into the year and the credit retraction will cause a recession in the US and below inflation rate growth in the UK, which will only just avoid the two consecutive quarters of negative growth that defines recession.
8. The UK Government will raise taxes quite heavily, probably on motorists and luxury taxes, in the budget to try and balance the books. There will be more public sector strikes as the government attempts some desperate controls on the spending tiger it has unleashed.
Some pretty bold ones there, I'll be impressed to get 65% right again this time next year!
Posted by CityUnslicker