FT Forecasts 2018: From US-China trade war to Mideast chaos
The FT's senior commentators give their big predictions for the year ahead, from a US-China trade war, to Theresa May surviving as UK prime minister and chaos in the Middle East.
Filmed by James Sandy and Donell Newkirk. Produced by Daniel Garrahan. Additional footage by Getty and Reuters
So my big prediction for 2018 is that it will be the year of fastest global economic growth, since before the crisis. It will surpass 2017, which has already been very good. Momentum is building up across the world economy. And people will be beginning to take more risks.
At the same time, the signs of overheating will begin to emerge. Slowly, probably, in the course of the year, inflationary pressure will begin to emerge. Central banks will be beginning to become more anxious. Monetary policy will be tightened, perhaps more quickly than we now expect. And that's going to start hitting very highly valued markets at some point in the year. And a correction in markets seems to be quite plausible.
Big tech, and their monopoly power, was one of the biggest stories of 2017. And my bet is it's going to continue to be one of the biggest of 2018. Facebook, Amazon, Google, and so on have been very successful at battling away regulation.
That might change in the coming year. They're coming under more and more pressure to be regulated like other kinds of firms. So far, tech firms have been able to consider themselves the town hall. They don't have to be responsible for what happens on their platforms. But there's growing pressure.
After scandals like the YouTube scandal around child pornography. Battles between Uber and Google over IP theft. All of this is making regulators question whether there shouldn't be more of an aggressive stance against the big tech firms.
My big prediction for 2018 is that Theresa May will probably survive as prime minister. It seems absolutely implausible, now the end of 2017, when she has a very slim majority and troubles with the DUP, her co-governing party. But I think that the sheer absence of alternatives within her cabinet should be enough, I think, to see her through another 12 months.
2017 was a year of, not just political shock, but political disruption. It was a year when Donald Trump used his Twitter account and his social media presence to completely turn upside down the normal rules of politics. 2018 is going to be a year when voters, and politicians, and pundits alike realise that that disruption is not going away, and is going to be the new normal.
I think we're likely to see the beginnings of a US-China trade war in 2018. Some people have written off Donald Trump's protectionism because in his first year in office, he didn't actually deliver on promises of swingeing tariffs on China. But actually, if you look at what's in the pipeline of American trade policy, there are investigations into China's intellectual property theft. There are investigations into steel. These are likely to come to fruition in the 2018. And I think will lead to the imposition of some tariffs on China.
My big prediction for 2018, is more chaos in the Middle East. Two conflicts to watch. One is the power struggle between Iran and Saudi Arabia. And more recently, because of that the US decision on Jerusalem, you now have to watch the Arab-Israeli conflict, which was dormant for the past few years. On Saudi-Iran, best case scenario, but one that I'm not expecting, is a dialogue that begins between Riyadh and Tehran on a security arrangement for the region. Worst case scenario, more violence, more chaos across the Middle East.
On the Arab-Israeli front, best case scenario would be a peace settlement. But again, not one that I'm expecting. Worst case scenario is another intifada in the Palestinian territories.
In February 2017, Elon Musk announced that he was going to launch two fee-paying astronauts on a big rocket to go around the moon, and land safely back at Cape Canaveral. Now, the programme hasn't been looking too great. Because there have been delays on the Falcon Heavy Rocket, which he needs to make this flight. But my big prediction is that he is going to succeed by the end of 2018 in launching two astronauts around the moon.
My big prediction for 2018 is that we're going to see a lot more aggressive defences by companies when they face takeover bids or action by activist investors. I think we saw it at the London Stock Exchange, when it stood up against an attempt by Sir Christopher Hohn to dictate who should be the chief executive. We also saw it at Unilever when it faced an approach from Kraft-Heinz. Both those companies stood up. I think we're going to see more of that. And I think we're going to see more boards being prepared to be much more aggressive and hostile in their own actions.