There may be a British royal wedding to bolster consumer spending, but most analysts are not expecting a joyous year for the UK economy in 2018. As the new year comes into focus, many in the City of London have decided that there is an even greater threat ahead than Brexit: a new Labour government.
"Businesses are always wary of a change of direction in government,” says Adam Marshall, director general of British Chambers of Commerce. “There is real concern about nationalisation, very heavy regulation and massive tax rises, both on individuals and corporations,” he says.
Morgan Stanley told its clients that the prospect of a radical left-wing government, led by Labour’s Jeremy Corbyn, was a big risk for UK asset markets and advised against investing in companies that might be affected by policies including nationalisation and tighter regulation.
The US bank reckons there is a two-thirds chance of a snap election in the second half of 2018 once it becomes clear that the UK cannot secure the sort of Brexit deal it wants and the Conservative Party starts to fracture.
The lender thinks the prospect of a Labour government intent on raising taxes for the well-off and for businesses, nationalising the water companies, energy firms, postal and rail services is the biggest threat to the UK economy since the 1970s.
Even without political risk, the UK economy faces some major challenges.
"Too much of the post-2009 recovery has been built on debt and borrowing, which means future demand has been pulled forward and at some stage those loans will need to be repaid, which may dampen consumers' contribution to growth, especially as the housing market is cooling,” says Russ Mould, an investment director at the investment services provider AJ Bell.
Another problem is that the UK government is already spending much more than it earns in tax. Meanwhile, companies are reluctant to make capital investment or hiring decisions, given the uncertainty over Brexit.
_____________
Read more:
Brexit is an opportunity for stronger UK-UAE ties, says new Lord Mayor
RBS, Lloyd's of London say Brexit breakthrough won't change Brussels subsidiary plans
_____________
Mr Mould thinks the pound now looks undervalued “so that should at least help exports but it is hard to see why growth should markedly accelerate in 2018 from the modest levels we have seen of late".
JP Morgan, another US bank, is also predicting that while the euro zone will grow strongly, the UK will face specific headwinds that weigh on its progress.
“UK consumer confidence is likely to remain weak along with modest real income growth,” JP Morgan says.
Neil Wilson, a senior market analyst at ETX Capital, also predicts a lacklustre year: “I see the economy trundling along in 2018 - growth sub 2 per cent, but no nasty surprises. Global growth is strong and Britain can enjoy tailwinds but maybe isn’t able to exploit the benefits of that macro landscape like it might have done,” he says.
Households where finances are tight will also have a tough time, according to the Resolution Foundation, a left of centre think tank. A Bank of England survey found the first rise in levels of financial distress among households in 2017 for four years, with more saying they expect their personal finance situation to deteriorate in 2018 than to improve.
“Households’ worsening personal finances and increased pessimism about Britain’s economic outlook suggest that the recent period of consumption-led growth may be running out of track,” says Matt Whittaker, the chief economist at the Resolution Foundation.
Even as wedding bells chime, there are tough times ahead.
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
THREE
%3Cp%3EDirector%3A%20Nayla%20Al%20Khaja%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Jefferson%20Hall%2C%20Faten%20Ahmed%2C%20Noura%20Alabed%2C%20Saud%20Alzarooni%3C%2Fp%3E%0A%3Cp%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Carzaty%2C%20now%20Kavak%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ELaunch%20year%3A%20%3C%2Fstrong%3ECarzaty%20launched%20in%202018%2C%20Kavak%20in%20the%20GCC%20launched%20in%202022%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%20140%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Automotive%3Cbr%3E%3Cstrong%3EFunding%3A%20%3C%2Fstrong%3ECarzaty%20raised%20%246m%20in%20equity%20and%20%244m%20in%20debt%3B%20Kavak%20plans%20%24130m%20investment%20in%20the%20GCC%3C%2Fp%3E%0A
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The specs: 2018 Maxus T60
Price, base / as tested: Dh48,000
Engine: 2.4-litre four-cylinder
Power: 136hp @ 1,600rpm
Torque: 360Nm @ 1,600 rpm
Transmission: Five-speed manual
Fuel consumption, combined: 9.1L / 100km
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Indoor cricket in a nutshell
Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
SQUADS
South Africa:
Faf du Plessis (capt), Hashim Amla, Temba Bavuma, Farhaan Behardien, Quinton de Kock (wkt), AB de Villiers, JP Duminy, Imran Tahir, David Miller, Wayne Parnell, Dane Paterson, Andile Phehlukwayo, Dwaine Pretorius, Kagiso Rabada
Coach: Ottis Gibson
Bangladesh:
Mashrafe Mortaza (capt), Imrul Kayes, Liton Das (wkt), Mahmudullah, Mehidy Hasan, Mohammad Saifuddin, Mominul Haque, Mushfiqur Rahim (wkt), Mustafizur Rahman, Nasir Hossain, Rubel Hossain, Sabbir Rahman, Shakib Al Hasan, Soumya Sarkar, Tamim Iqbal, Taskin Ahmed.
Coach: Chandika Hathurusingha
