And more predictions 2012

Those 2011 predictions.

Made safe ones that mostly came to pass. Except interest rates. BQ predicted 2.25% by now. They should be, but they aren't. So that will help with next years predictions.

1. Inflation just won't go away. It will continue to rise, despite the politicians predictions, and will go well over 4% before ending the year at around 3.25%, still above target but the target is a fantasy one anyway..
If only!

RPI was 5.2% and CPI 4.8% so 5% inflation. Undershot on that one but I'll claim a point. Mervyn King promised 2% at the end of last year. None of us believed him.

2. Inflation will force up rates. They go up slowly initially as the recovery is precarious but then faster as they must. Despite the most hawkish calling for 4-5% rates in 2011 they won't manage more than 2.25%, but the trend is always up.

And I thought it was the banker too. But CU was right all along. Government is more than happy to inflate away the debt and our savings with it.

3.The USA finally begins to crawl out of recession. Decent retail and manufacturing numbers leave Europe wondering how they manage to do it. The exception being Germany , who continues to grow steadily, despite another Euro crisis.

Well..Germany stormed ever onwards and the USA is out of recession. 1.8% growth for last 1/4 and Jan figs look to be better. Amazing what you can achieve for just a few $ dollars.
{There was one estimate that every $35,000 job directly created by the stimulus costs $235,000 to create.}
Retail, hospitality,leisure all all employing now, so US unemployment figs fell to 8.6% , the lowest since 2009. Its fragile but its figures Cameron dreams of.

4. Even with all the strains of Euro states and banks debt refinancing, defaulting Spain and crumbling Italy no-one can figure out a way to get out of the Euro, so its stitched together with compromise, after compromise after bailout..and just survives 2011.

No mention of Greece, but still an accurate assessment I think.

5. Politics: All the leaders survive. Coalition settles down, despite MPs repeatedly being caught in media stings. In the end, the public reckon they have enough problems of their own, without worrying about who's bitching about whom. David Laws makes it back which gladdens the Tories hearts, as he gets more air time than foot-in-mouth Cable. Constant U-turns seriously undermines the governments credibility by the end of 2011 however, as they cave in too quickly and too often on politically sensitive cuts. Still, plenty of strikes and mob rampages though..

Not too bad. Dr Fox was that media sting. Fool still thinks he didn't do anything wrong. I didn't expect the actual looting riots though. But who did? And David Laws didn't make it back. Unsackable sage Vince stumbles and grumbles on.

So for 2012.

1. Cameron likes his new found Euroscepticism. He does a little more of it and wins a decent concession before handing over a binbag of billions. The Liberals threaten to pull the plug on the coalition a few more times, mostly over Europe and something else no one really cares about. House of lords reform probably.. Coalition rumbles on into 2013.

2. Retail/leisure/hospitality is dreadful. £ strengthening also weakens exports so the UK has an official recession with 2 1/4 of mild negative growth. Many , many more businesses and retailers collapse. The recession has gone on too long. There's no reserves left to prop up a poor period.
{Astonishingly C@W favs to fail, Blacks & HMV, are still {technically} in business at 2011 year end. Good for them.}

3. Interest rates don't rise at all. The effect of the VAT rise falls out of the inflation figures allowing a pretence of inflation falling.

4. Wins for Obama and Boris. And a good Jubilee & Olympics too. Tube and train drivers have to be bought off yet again. Boris and Cameron plan for a post Olympic attack on the capital's tube drivers. Either a linking of pay for bus and tube drivers, longer hours or even driverless trains are announced. Contingency plans have been made for the chaos. The plans are for spring 2013, but they leak out.

5. The Eurofudge cannot last. Someone has to go. Probably Greece but it might be Spain.
Managed exit is finally produced for 'a limited period' and somehow the lucky country is still in the Euro, despite not having the Euro currency as we know it.