With the festive season now sitting comfortably in our rearview mirrors, it's time to start looking ahead and counting the coffers. With Donald Trump taking no prisoners in the US and the UK set to sever its trade ties with Europe, 2019 looks set to be a famously tumultuous year, with uncertainty very much the word on the tips of every financial forecaster's tongue.
Here, we'll examine the forecasts at home and across the pond in order to make some small amount of sense of the bluster and the panic.
Donald Trump's trade disputes with both Europe and China have created an environment of stifled investment in the US, but it would appear a full-blown recession is highly unlikely. Whilst to say Trump has been a divisive figure on the world stage would be an understatement, his policies have at least gone some small way towards helping US GDP increase at an annual pace of 4.2% in Q4 of last year. However, the positive impacts of last year's tax cuts are looking set to fade in 2019, with Goldman Sachs suggesting that GDP growth will slow down to around 1.6% by the end of the year.
Less growth and more uncertainty is very much the pervasive line being fed by US financial analysts and it's easy to see why. Interest rates are rising, as are trade tariffs (thanks again to our friend Donald) and Wall Street watchers have suggested that growth in earnings has already peaked.
In the UK, Brexit is the perennial fly in the ointment that the vast majority of analysts agree will have a profoundly negative effect on the UK economy in 2019. Of course, the final details of the deal are still being hammered out and it's all to play for, but the sheer uncertainty surrounding Brexit is expected to weigh heavily on the economy until we know exactly where we stand. Indeed, in the event of a no-deal Brexit (which is looking increasingly likely), the European Commission has stated that economic growth in the UK is tipped to be the slowest in Europe this year, falling alongside Italy at the foot of the table.
However, the unemployment rate is expected to be largely unaffected in the short term, with the general expectation that it will remain in the current plateau of around 4.5%. Interest rates are set to rise, whilst inflation is expected to fall towards the 2% target set by the Bank of England and house price inflation is predicted to average at just a shade over 3%. Looking outside the US and the UK, however, there is a lot of global economic growth, which is sure to have a positive impact on exports and business investment at home.
A Port in the Storm
Of course, wherever you stand on the economic scale, times are more uncertain now than they have ever been before. In such uncertain times, it's always handy to know there's a source on hand to offer no-stress personal loans to keep the ship floating along comfortably, even in times of great financial turmoil. Likely Loans offer just that and can give you a no-fee quote in minutes which won't affect your credit score and could offer you and your family some genuine peace of mind.