My five financial predictions for the New Year

Will the UK economy be able to bounce back after a dismal 2020? We don’t have a crystal ball but it’s useful to speculate anyway, writes Hamish McRae

Could there be a light at the end of the tunnel? (iStock)

Mark Twain allegedly observed that “prediction is difficult – particularly when it involves the future”. The origin of the quote is disputed, but what is not in dispute is the sentiment, for making predictions about financial markets is a sure-fire way of making a fool of yourself.  

Yet we all do it. The City forecasters do it professionally, and the rest of us do it implicitly. Anyone making a decision about buying or selling a house is making some sort of assumption about how house prices and interest rates will move. Anyone who changes job is taking a view on the security or otherwise of their new employer’s business. Even a simple decision on whether to buy currency for a foreign holiday money early means you are making an exchange rate forecast.

So the usefulness of forecasts is not so much to say what will happen, for no one can know. Rather it is to set out a template into which people can fit their own ideas, and make their own judgements. In that spirit here are five of mine for 2021: