The dawn of a new calendar year provides an opportunity to evaluate economic trends, personal financial responsibilities, and other money matters that may impact your household in coming months. It isn’t always easy to precisely predict potential outcomes, but contemplating expert opinions and taking stock of financial conditions at home can help you set out in the right direction, early in the year.
A recent Independent article shared expert opinions, outlining a series of financial prospects that could become realities in 2019. The team weighed-in on big events and key issues that could directly affect financial lives in the months ahead, in both subtle and sweeping ways. Their insight includes forecasts about petrol costs, property trends, supermarket prices, and conditions in financial markets. Key industries, personal habits, tax law, and other factors were considered, compiling the informed predictions.
Brexit remains one of the biggest influences, shaping expert opinions about the coming year. In fact, the pending departure from the European Union is such a game-changing event, many analysts assume it will define investment markets in 2019.
Chief executive of the Share Centre, Richard Stone, highlighted one potential Brexit outcome. According to Mr. Stone, parliament’s failure to embrace consensus around Brexit may result in a second referendum. If his prediction holds, the vote putting resolution back in the hands of citizens could result in a public mandate to remain in the EU, rather than follow through with a split. A general election may follow.
If the decision is made to remain, markets may face volatility in 2019, though a rally is possible, related to the prospect of no Brexit. The value of sterling may bounce, which could slow the pace of a rise within the FTSE 100. It is thought international aspects of FTSE components would explain the slower rise in the market.
Brexit isn’t the only influence at work, shaping investment markets in 2019. According to Stone, US politics and trade policy may cause US market volatility, particularly in light of President Trump’s America First agenda and re-election prospects. Higher levels of regulation and taxation may also come to bear on market performance, placing downward pressure on tech stocks. With potential volatility in store for personal investors, Mr. Stone advocates a long-term investing approach that carries through passing episodes of volatility.
Uncertain times typically don’t bode well for consumer spending figures. And with Brexit moving ever-closer to a no-deal outcome, shoppers do appear to be backing away from unnecessary spending. Britons have access to credit, including no-credit-check products, so money’s available to cover costs. But interest rates may be headed for a hike, adding further uncertainty to the mix for Britons already unsure about their 2019 finances.
Although wage growth is presently outperforming the trend seen in recent years, the current low level of consumer spending provides clues into the future of retail consumer goods. Even with Black Friday sales and other retail offers to draw them in, consumer spending dipped in November, down .7 per cent compared to the prior year. The confusion surrounding Brexit is likely to continue stifling spending, as shoppers struggle to get a handle on their financial futures.
Overall, the weekly shop could become more expensive, supporting the belief of many unsure consumers. Produce and other goods originate outside the UK, so products coming from within the European Union pose questions for household budgeters, leading up to the March 29th departure date.
Household Energy Bills
Britons looking for good news from energy suppliers will be disappointed if a no-deal Brexit carries forth. The EU now provides about 5 per cent of the UK’s electricity, as well as more than 10 per cent of its gas supply. Rising tariffs and other costs stemming from the highly integrated energy market are sure to impact costs, though UK residents have choices available to them, which can help them secure the most affordable plans.
Predicting the economic trends that are in store for UK households this year; analysts point to unsettled conditions in retail, investment, and energy markets. Good news about Brexit may help stabilise the situation, but until questions are answered, uncertainty will continue casting doubt on financial security, this year.