Things that we think will happen in finance in 2019
Here’s what our advisers think will happen in the world of finance in 2019. We’ll come back to these predictions early in 2020 to see if we were right!
#1 The uncertainty over Brexit will persist
We’ll start with this one as it is impossible to look very far into the year without making some sort of assumption about Brexit. In 2019, we predict that the uncertainty over Brexit will persist, increasing as we get closer to the UK’s scheduled departure date of 29th March. At this stage, no one can accurately predict how Brexit will play out so all we can say is definitely…maybe?
#2 The housing market will remain stagnant
We anticipate that UK house sales will remain stagnant in 2019 due to the continued uncertainty over Brexit. It’s well-known that when buyers are uncertain about the future they tend to put plans to make a purchase on hold. With house prices still high relative to incomes, many buyers have also been priced out of the market, particularly first time buyers.
#3 Currency markets will be volatile
Currency markets hate uncertainty. We therefore predict that the pound’s fortune will continue to fluctuate as the drama around Brexit continues. Once there is a clearer outlook, we expect that the GBP£ will strengthen against the US$ and the Euro€. We therefore recommend you defer buying your holiday money to ensure you get a good deal.
#4 Pension prospects will improve for those in employment
The Auto-Enrolment Program will finally be fully integrated this year. The minimums rise again in April 2019 from 5% (with at least 2% from the employer) to 8% (with at least 3% coming from the employer). If you’re employed, your contributions will be increased from April onwards improving your pension prospects. It has to be remembered that saving into an Auto-Enrolment scheme is only the first step when planning for your retirement. If you want a financially secure retirement it is essential to contribute as much as you can and to make sure you regularly review your pensions.
#5 Bank rates will rise again at least once
The Bank of England increased its base rate from 0.5% to 0.75% in 2018 – the highest it’s been for over a decade. The pressure is on to return to ‘normal’ interest rates which means that the Bank of England would very much prefer to increase interest rates. This is countered by slow growth and low inflation. Depending on the Brexit deal secured by the government, rates could go up or down this year. However, on balance, we predict that interest rates will raise again at least once in 2019.
#6 Technology will make managing our finances easier
On-going technological innovation, regulatory changes and a new generation of consumers who have grown up empowered by technology, are putting pressure on finance companies to adapt their services. In 2019, we expect that automation will streamline business operations and customers will have increased access to tools that allow them to manage instantly financial tasks such as monitoring real-time investment data.
#7 Inheritance Tax receipts will spike
In 2018, Inheritance Tax (IHT) receipts reached £5.221bn, a steady increase compared to figures recorded the previous year. However, we anticipate that there will be a spike in IHT receipts towards the 2018-19 tax year end due to the new prospect of probate fees. If you’re concerned about IHT, planning now could save your loved ones thousands. Get in touch with us for a free, 1 hour consultation.
#8 FTSE could be due a recovery?
Certainty over the Brexit outcome should deliver an increase in the FTSE 100. On the one hand, a hard Brexit makes Sterling weaker driving share prices higher, as we witnessed in June 2016, two-thirds of earnings of FTSE 100 companies are generated overseas. On the other hand, a softer Brexit would be welcome by the market leading to the FTSE rally. We think the FTSE 100 will go above 7,500 in 2019.
#9 Trump will continue to astonish
Doubts about whether he will serve a full term have haunted Trump ever since he took office. These have been fuelled by everything from his erratic behaviour and house investigations to the recent Mueller bombshell. Whatever we predict he will do in 2019, what he actually does will be even more bizarre!
#10 Royal Baby (Pink or Blue?)
Prince Harry and Meghan Markle have of course announced that they are expecting their first baby due in Spring but have not yet revealed the gender. Our money is on a girl!
Do you agree with these predictions? Please feel free to share this article on social media and let us know what you think lies ahead in 2019. To contact our experts, please call 01244 347 583 or email us at: info@innesreid.co.uk.
