When this small bit of Londonist launched its IPO this summer, we had no inkling that the economy would soon be in very choppy waters. Since then we’ve seen a bank run, huge corporate losses, and grim warnings across the board.
And yet somehow, bankers are still getting huge bonuses, people are still spending money they don’t have, and the rich-poor gap is getting wider and wider.
All of this has left us quite befuddled - and that’s even before lashings of the Christmas goose, wine and cheese (admittedly, we ate more this year, anticipating price increases).
So in the spirit of the season we’re offering up our predictions for 2008. They’re worth about as much as the paper they’re not printed on – but we’re fully prepared to admit they may go down as well as up.
-The dollar will steady against the pound. Interest rate cuts in the UK will be part of the story – and bad news in whatever form will hit both countries about the same. If you’re looking for bargains, get thee to New York now.
-London house prices will steady – but not fall dramatically. It’s interest rates again. Cuts will make mortgages cheaper and give a bit of a boost to the market, probably enough to offset the recent downturn. Unfortunately, stagnation doesn’t make the situation for first-time buyers much better.
-The City won’t suddenly become a homeless shelter. Job losses are not out of the question, and some CEOs may be toppled. But as they’ve amply demonstrated, traders and bankers are good at distributing risk. The fallout from the credit crunch will land in a variety of places, but the City won’t be badly hit.
-Big-name shops will suffer as consumer spending slows. This will happen, eventually. Maybe next Christmas? If economists keep predicting something, they’re bound to be right at least once.
-Tube fares won’t go up. Okay, so we’re cheating on this one – it’s amazing, but true.
By Mike W
