The year ahead by Pat Doody, Nat West Business and Commercial Banking Director

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Pat Doody, Nat West Business and Commercial Banking Director

Each year Lincolnshire Today Magazine invites a select panel of the region’s business leaders to offer up their predictions for the year ahead. It has become something of a tradition, given that we’ve been doing this now for over 30 years. And, while none of us possess a crystal ball, it is uncanny how accurate some of these forecasts have been.

Here we speak with Pat Doody, Nat West Business and Commercial Banking Director to get his thoughts on 2018…

2018 – A year of major events and possibly major market changes

2017 will be remembered for a few different events, but also it will be seen as a year when the financial markets were relatively calm. Although we saw fresh highs in equity markets despite rising US interest rates and the first UK rate rise in over a decade. So what will 2018 look like.
Negotiations on the UK’s Brexit from the EU will continue, moving onto trade and transitional arrangements after lengthy discussions over how to divorce and what bills there are to pay. The raft of elections in Europe are also set to continue next year, with Italian elections due by the 20th May, as well as the possibility of a re-run German general election, depending on whether a viable coalition government can be formed. In the UK and US there is the potential for further rate increases from the central banks, with inflation pressures remaining elevated, and the Federal Reserve will, in all likelihood, continue the slow process of balance sheet reduction. UK growth should continue, but there may be a shift in terms of inflation pressures, with more being domestically generated, especially if the labour market remains tight.
Asset and FX markets may be affected by both political and economic volatility, and there may be a continued shift in economic power away from the developed Western economies and over to the developing Asian, African and Latin American economies. That may in itself be the source of uncertainty, at least in terms of recent markets trends, and of course, there is always the risk of the unknown, throwing a curveball at the UK/global economy, just like we had in 2016 with Brexit and Trump, and in 2017 with the outcome of the UK and German general elections. Yes, 2018 could be an interesting year for the UK economy and global markets.