Have I got news for you. We are about to enter a boom year, with growth rising by 5 per cent, real earnings increasing by nearly 3 per cent, inflation holding at about 2 per cent, and employment at its highest since records began, falling towards – or even below – the 7 per cent level by the end of 2014.
This cheery forecast comes to you fresh from economist Dr Ros Altmann, who's just told me to get our seatbelts ready for a year of soaring growth. This is why: private sector confidence and investment are at their strongest levels since records began in 1998; manufacturing and construction are booming. House prices are picking up and UK's companies are spending the £1bn they have in the bank. Add to this the Government's own 7.3 per cent investment this year, and you have a cocktail for a pre-election "boomlet".
What's more, the LSE-trained economist and Joan Collins lookalike is as ballsy as her dopplegänger's Dynasty character. What's refreshing, too, is her independence, neither beholden to the banks nor any government agency. Yet she's so sure of her growth numbers that she has pitted them against that of fellow economists in a recent "clash of the titans" debate at the Royal Institute, snippets of which will be broadcast on Radio 4's Today programme this week.
So why is Dr Altmann such a lone ranger? She reckons it's because mainstream commentators and economists, and even the Bank of England's own soothsayers, have ignored the strength and breadth of this recovery, focusing instead on lagging indicators such as employment. It's either that or they have got so used to the bad news that they can't see the wood for the trees, and they like low interest rates.
Either way, if she's on the money, then George Osborne is going into the pre-election year with the best Christmas present ever. Coming with the latest forecast, however dubious, that the UK will overtake Germany as Europe's biggest economy by 2030, his electioneering couldn't have got off to a better start.
But the more fascinating question is whether Osborne has schemed all along to get the economic cycle to coincide with the electoral cycle. Or he is simply lucky? Or both? He's certainly delivered all the traditional UK growth levers with rising consumer borrowing and the housing market. Even a mini-boom leaves Labour completely blind-sided, while moves to hold down energy prices and cap rail fares undermine opposition plans to fight on living standards. Labour may have shot itself in the foot by overplaying the impact of austerity and by failing to spot the signs of recovery, thus allowing the Chancellor to restore some of his economic credibility.
Where Osborne hasn't been so successful is bringing about the big dream of rebalancing away from finance and services towards exports. An even bigger disaster is the failure to get house-building off the ground to get house prices and rents down. So if the Chancellor wants a Tory majority, Help to Build is better than Help to Buy. Before he gets too cocky, he should also remember that old saying: opposition parties don't win general elections; governments lose them.
Capital Wars: East vs West
Here's another wake-up call for the new year, one that's not so cheerful. City financier Daniel Pinto, of Stanhope Capital, warns of a world locked into an existential struggle between two opposing forms of capitalism. In Asia, India and Latin America, companies are still being run by owner-managers who are natural empire builders – tycoons such as India's Lakshmi Mittal of ArcelorMittal, or Brazil's oil giant Petrobras, now the 20th biggest company in the world.
By contrast, Pinto says Western capitalism has suffocated its heroes: business has become bureaucratic and corporatist. Tragically, the once great captains of industry who created world-leading companies and brought prosperity to their nations have been turned into professional PR stuntmen who operate like administrators rather than as entrepreneurs.
And Pinto knows what he's talking about – the Frenchman, who runs one of the bigger independent investment firms in the UK, has advised leaders such as Mittal as well as Western CEOs, governments and entrepreneurs around the world. He became so disturbed by what he saw that he's written a book – Capital Wars – to be published next month by Bloomsbury. It's a great journey into boardrooms around the world, and a scary one too. He makes no bones about how so many CEOs in the US and UK have become spineless bureaucrats. But his greatest scorn is reserved for the short-term nature of investors, whether they are the big pension funds or high-frequency traders who want only short-term rewards. The result? Paralysis. In the longer term, Pinto worries about something far more dangerous: that the West will lose out and crumble unless it reinvents itself and revives its entrepreneurial spirit. He has a solution: read the book to find out. Whitehall should be placing a bulk order.
Checks and balances
Luckily, there are still some heroes left in the West, and Sir Tim Berners-Lee did well to remind us so in his Christmas message. As he pointed out, the decision by Edward Snowden, the former NSA contractor, to turn whistleblower, did the world an enormous favour. What was poignant, though, was the way Berners-Lee described what Snowden did as a "really important part of the system". System is the key word, and one the father of the World Wide Web knows we can't ever escape; it's a monster that will ensnare every bit of data we as individuals provide through phones, computers and any other devices, and won't go away. Rightly or wrongly, this information is of great value to governments and security forces. Politicians being politicians, they will also want this information. That means we will always need checks and balances, heroes such as Snowden to counter the dark forces. Yet true heroes are those who are prepared to die when they go to battle. Does that mean Snowden will stay for ever in purgatory? Berners-Lee and other supporters of the open web now need to work out how we tame this monster, whether there are other ways for people like Snowden to spill the beans.
Jane Merrick returns next weekReuse content