16 unlikely predictions for 2020 for business, politics, markets and more... but, then again, you never know

By Dan Atkinson

Could offbeat forecasts prove to be accurate for the new year?


A new year and a new decade draw near. Wise, considered and thoughtful predictions abound. Investors and traders are spoiled for choice when it comes to respectable forecasts for 2020 and beyond.

But would you be better off paying attention not to such consensual views but to the more offbeat, even off-the-wall, predictions offered by those outside the charmed circle of polite financial society?

After all, respectable forecasting hasn’t done too well in recent years. Remember President Hillary Clinton, or the inevitable triumph of Remain in Britain’s 2016 referendum on European Union membership?

In that spirit, here are 16 predictions for the year ahead. Some may strike you as daft or even outrageous. As outrageous as Donald Trump in the White House and UK withdrawal from the European Union, perhaps…

1. President Donald Trump pulls America out of the World Trade Organisation, claiming the WTO rulebook is stacked against the US and favours its European and Asian competitors. Protests that the US is supposed to be the lynchpin of the world trade order fall on deaf ears. Freed of WTO oversight, Washington puts up significant new tariff and other barriers. For good measure, Mr Trump also withdraws the US from the UN Industrial Development Organisation and UN Conference on Trade and Development.

2. Germany, Finland and the Netherlands stun fellow EU leaders by calling for “managed devolution” of the euro-zone, a euphemism for splitting the single currency into two parts. A “hard” euro will circulate in Germany and its allies, while a “soft” euro will be used in the rest of the union. French President Emanuel Macron insists on France being allowed into the hard-euro club, but the austerity measures demanded by Germany as the price of membership spark widespread rioting.

3. Ireland and Denmark follow Britain out of the EU. “We three countries joined together in January 1973,” said a spokesman in Dublin, “so it seems right that we should leave together.” Plans are floated for a revived European Free Trade Area, to include non-EU members Norway and Switzerland. Its headquarters is to be in London, putting Britain, in the words of Boris Johnson, “at the very heart of Europe”.

4. Japan enters yet another “lost decade” of slow or no growth, stagnant living standards and an ageing population. Film makers and TV scriptwriters cash in on a wave of nostalgia for the boom years of the Nineties, when the Japanese were buying up US industry and the grounds of the Imperial Palace in Tokyo were valued at more than the State of California. Prime Minister Shinzo Abe orders “helicopter drops” of cash on to the general populace in an attempt to spur growth.

5. The US-China trade war is settled and a new, exclusive deal is struck among Washington, Beijing and Moscow. Amid complaints from Europeans and others of a “cartel” trying to dominate the world economy, the three powers propose deep co-operation on a range of matters from defence and diplomacy to energy, communications and space travel. President Trump says this new alliance is planning “a big, beautiful space station”.

6. Boris Johnson, returned to office in December 2019, stuns Tory traditionalists with sweeping cuts to the defence budget, with savings invested in the National Health Service. The second aircraft carrier is sold to India and Trident is replaced by a modest bomber squadron armed with atomic weapons. Jeremy Corbyn accuses the Prime Minister of playing politics with the country’s security. “Give peace a chance,” ripostes Boris.

7. The 14-nation Organisation of Petroleum Exporting Countries holds “full and frank talks” with Extinction Rebellion, after which OPEC announces a change of name, to Outfit for Promoting Energy Cleanliness. XR says it can do business with the new OPEC, especially as its price-fixing activities make oil more expensive than would otherwise be the case. Donald Trump says OPEC’s change of heart is “sad, just sad” and announces huge subsidies for US shale oil production.

8. Canadian Prime Minister Justin Trudeau terminates longstanding free trade arrangements with the US and lodges a Canadian application to join the EU. He cites the precedent that Saint Pierre and Miquelon, an integral part of France, is right next to the Canadian province of Newfoundland and Labrador. “Canada’s values are European values,” he declares. French President Macron declares himself delighted, with special regard to Quebec.

9. BT, long criticised for chasing television deals instead of attending to the phone network, says it is “bending to the inevitable” and getting out of telephony altogether to concentrate on sport and entertainment broadcasting. Its phone interests are bought by a gas supplier, which funds the deal by selling its water interests to an electricity company. The Business Department launches an inquiry into misleading corporate names.

10. The Financial Conduct Authority gives itself a clean bill of health with regard to regulation of the Woodford fund, the M&G Property Portfolio and “any future cases in which investors have been unable to access their funds”. Without this blanket, pre-ordained pardon, says the FCA, “we would be unable to perform our important tasks, as we would be distracted by the constant need to get things right”. This would place, it said, “an intolerable burden on staff”.

11. Another swathe of “informal dining” outlets closes as the “pizza and pasta” bubble of recent years is well and truly deflated. Investors who had backed the family friendly casual restaurants are furious. “Nobody told us,” said one, “that the demand for an American Hot with a carafe of red wine was anything other than inexhaustible. We have been victims of mis-selling, pure and simple.”

12. Elsewhere on the High Street, a prestigious household-name retailer collapses into administration. The management blames on-line competition, business rates and the public’s woeful failure to spend money in its stores, but exonerates from any blame the high prices, dirty carpets and poor customer service, not to mention never quite having clothes in the right size or food of the right type.

13. The Bank of England makes a “forward commitment” to leave interest rates where they are for the next five years. This allows for the mothballing of the Monetary Policy Committee, with considerable savings in terms of salaries, running costs, press conferences and so forth. Chancellor Sajid Javid welcomes the move, saying it “gives businesses and households a long period of stability”. Asked what would happen if inflation rose, he replied: “Inflation – what’s that?”

14. The gold price soars to $2,500 an ounce on the back of loose monetary policy in the US and Europe. This is great news for gold-producing countries in Africa and elsewhere, but prices many customers out of the jewellery market. Wedding rings in particular are increasingly made of substitute material such as silver, platinum, brass and fuse-wire.

15. Meanwhile, crypto-currencies crash across the board as investors and traders take fright at the intangible nature of cyber-money. Those who failed to get out in time demand a full public inquiry. “How were we to know,” asked one, “that made-up funny money supposedly sitting on a computer on the other side of the world may not be entirely rock-solid?”

16. President Trump appoints Democratic contender Bernie Sanders as US Treasury Secretary, citing their shared belief in low interest rates, high employment levels and the desirability of “running the economy hot”. Speaking of a “new consensus”, Mr Trump was asked how he felt about Mr Sanders’s self-proclaimed socialism. “A detail,” replied the president.

FURTHER READING: Where is the cryptocurrency industry heading in 2020?

FURTHER READING: Nasdaq 100 forecast for 2020

FURTHER READING: Telecoms services: why 2020 might be a challenge

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