We asked one of the country’s top futurists, Dr Patrick Dixon, to take a look at the year to come, and answer a few questions on what he thought would be in store for us! 1. UK economy?

”Well, these are exceptionally tough times. We are about half way through the current crisis – this has been going on already over 18 months. So we can expect a tough 2009 and things should start picking up in 2010. Companies that shed staff early and have conserved cash should do well in the upturn: lean and fit and with finances available to buy up other companies or assets at knock-down prices. A lot of fuss has been made about the fall in the pound but this is really good news for any company that sells goods or services outside the UK, this will also mean that people will spend more at home – whether on holidays or other things.” 2. The UK housing market! do we sell up or stay put? Is renting a good option right now? Will housing become more affordable again?

”Each individual’s circumstances are totally unique but here are some general thoughts. The market is most likely to continue to drop sharply, but will eventually level out. The more it falls, and the lower mortgage interest rates go, the more likely it is that we will see a rebound and strong recovery, as many people decide to come back into the market or enter for the first time. Much has been said about mortgage markets changing forever, but that is very unlikely. The mortgage market will eventually settle down, and will become attractive and competitive again. Once we become convinced that we are in the early stages of a Strong property price recovery, we will see loan to value ratios will become more relaxed, and we will see a return of 90% mortgages. Home loans are the largest and most important financial transaction most people do in their lifetimes with the exception of personal pensions, and so will become once again a very important part of retail financial services.

”Remember that the cost of buying or selling is high due to legal fees, stamp duty and the rest. The cost of renting has not fallen as quickly as house prices yet in many areas so renting can be more expensive than you may think. Housing is already more affordable than for years – we have seen salary inflation of 3.5% or more in the last 2 -3 years, while actual property prices have fallen up to 15%. Put them both together and you have around 25% drop in costs – and that is before mortgage rates started falling, by 30% in some cases. When you look at the whole picture it seems likely that in the next 6 months we will see some wonderful bargains, with actual costs of ownership per month of less than 50 percent of what it was just 18 months ago. But first time buyers will still need a bigger deposit than in the past. Remember too: most people own to live in a home and not for a 2-10 year investment. It is very important to take a long term view in all property decisions.” 3. UK Job Market.. what kind of industries are most likely to make high job cuts? What are employment chances like now if you lose your job?

”Retail jobs will be very hard hit in January to June as the reality starts to hit home. McDonalds, Lidl and others trading at the bottom of their markets will continue to do very well. There are many sectors is surprisingly strong with 850,000 vacancies that were officially known about in December 2008. In previous downturns it has been very unusual for well motivated people to be out of work for more than a year.” 4. Credit/borrowing market! will we stop being reliant on cheap credit? Will we now think about saving more?

”These things are just cycles. We are about to enter a new cheap credit boom, fuelled by the lowest borrowing costs in history. The result in the medium term is most likely to be another overshoot, high inflation, high interest rates, eventually leading to another crash which could happen by 2015. As we have seen – swings can happen very fast from one end to the other.”

To manage your money over the coming months, regardless of age, those Britons concerned about their capacity to manage their money may want to consider applying for a cheap loan. By taking out such a loan, borrowers may find that they are able to merge various financial commitments into a lower monthly repayment.

5. The world economy! what affect will the world economy has on us all? What about £ sterling and our travel/work abroad?

”This will continue to lurch from event to event. All eyes will be watching the price of the dollar. Despite the massive US crisis the dollar has increased or retained value against most currencies, as billions of dollars of US investments in many other nations are brought back to service debt and other urgent commitments. Eventually the massive return flows will slow down drastically. When that happens the big question is who will want to buy the dollar? Countries like China have purchased over a trillion of US dollars and are saving them for now. But what if they start to sell? They can’t sell too many or they will force a dollar crash and what is left of their assets will be worth a lot less. Although they could sell enough to force a gradual dollar decline”

Steve Smith writes for All About Loans. Visist us today to apply for cheap loans online, personal finance, and UK tenant loans.

- Steve Smith

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