Economic Predictions for 2009

kaflinkle

Thought I would start a thread asking people what you think is going to happen in 2009 and possibly beyond?

I personally think that Barcap are hiding a few nasty surprises and are going to go running to the government and RBS may be fully nationalised.

Generali

I reckon by year end 2009:

- UK GDP down 2 - 3%
- UK unemployment up to 3,000,000 or pretty close
- Interest rates > 0%
- Mild deflation
- RBS nationalised
- Government having to cut spending as they can't get away the Gilts issues that they would like
- Falling consumption due to continuing unavailability of credit
-Possible minor shortages of non-essential items as the trade deficit becomes harder to finance

In summary, pretty bad but not apocalyptic.

It's little more than a guess though really although a bit of fun putting it together. I suspect Obama's going to turn out to be a protectionist. If there are protectionist policies introduced then things will get very bad quickly.

handful

I agree about the Obama prediction. I think America will be on the crest of a wave for a while and the dollar will strengthen and possibly the confidence currently lacking will return....for a while, but this crisis will take more than confidence to resolve. This Obama factor could have an adverse effect on other economies, particularly those with leaders lacking his charisma, ours comes into that category.

kaflinkle

My calculator has more charisma than Brown and it's better at sums...

Really2

Generali wrote: »

- Government having to cut spending as they can't get away the Gilts issues that they would like
.

Can we do quangoes first those stupid bloody things which fine business's then use the money to opperate. It just a poor service tax where no one actualy benefits except the bloody quango.

ad9898_3

Economic prediction for 2009 ??.......... worse than 2008, so with 2008 giving us -16% on house prices, expect -20% over the course of 2009.

And before anyone says low interest rates, lets just remember they are good for people with houses, useless for a FTB'r who is looking for a mortgage to buy a house with less than 25% deposit, add to that deep recession, unemployment, short time etc.. etc...

No FTb'r, means no chain, means no sale, as BTL, which replaced the FTB'r over the last few years on any meaningful scale, is dead.

Really2

Just a thought why as the massive rise in unenployment over the last 6 months not resulted in a massive increase in the number of houses coming on the market? (Surely people would look to sell before reposession?)

Are people not as thick as they make them out on here and have stashed money and taken out mortgage cover etc and not Mewed it all away?

itsnever2lateisit?

kaflinkle wrote: »

Thought I would start a thread asking people what you think is going to happen in 2009 and possibly beyond?

I personally think that Barcap are hiding a few nasty surprises and are going to go running to the government and RBS may be fully nationalised.

The Arab investors in Barclays have a 'non dilution' clause which means if Barclays need more capital the Arab investors get free shares.

Having said that I wouldn't put it past Darling Brown to buy 50p shares for 161p

luvpump

handful wrote: »

I agree about the Obama prediction. I think America will be on the crest of a wave for a while and the dollar will strengthen and possibly the confidence currently lacking will return....for a while, but this crisis will take more than confidence to resolve. This Obama factor could have an adverse effect on other economies, particularly those with leaders lacking his charisma, ours comes into that category.

I agree, all this obama Mania will be short lived, His Job is to look after US Citizens,thats the bottom line, as they are the ones who voted for him, But he will non-theless be given a lot of slack i suspect.. Tough Job either way..

purch

I agree, all this obama Mania will be short lived, His Job is to look after US Citizens,thats the bottom line, as they are the ones who voted for him

100% agree

The obsession with Obama that the U.K. and World media is displaying will begin to look foolish in a few months.

The U.S. will turn inwards, and look after itself first and foremost.

Protectionism will be the new mantra.

Probably the main effect Obama will have on the U.K. is that he won't go around invading random sovereign nations for no apparant reason, and dragging his 'lap dog' (us) along with him.

Radiantsoul

Inflation to reach zero in May 2009 before rising again.
House prices to fall 2% per month till May-June, this will then slow to 1% for a few more months before house prices stabilise at the end of the year
Interest rates unlikely to be cut till March or April. I think there is probably only one more cut remaining and then rises are on the way(probably up to 6-7% in 3 or 4 years time).
Unemployment to rise sharply in the first half of the year.
Oil prices to remain below $50 except for the odd short term shock.
Government to introduce further capital into the banks.
Share prices to continue to fall although at a slower rate than last year
Commercial property prices to tank and thereby cause large losses in bank shares.

Overall I suspect enhanced credit, an expansionary US, strong fiscal and monetary stimulus and the disappears of the chance a systemic collapse in the banking system to increase confidence. Oversupply in some markets will force down producer prices and so offer opportunities(for example if rental on shops fall by half then it might be a good time to open a restaurant). I suspect the economy will begin to recover in Q4.