From Technology to Oat Milk Recycling, Here Are Our Predictions for 2023
The Ukraine crisis, the British economy and global climate talks will face turning points next year, say our experts.
We come to the end of yet another “unprecedented” year. The UK had three prime ministers, grieved its longest-reigning monarch and watched as energy and food bills soared in the wake of the Russian invasion of Ukraine.
Trying to predict what happens next year might therefore sound like a mug's game, but brave editors and reporters from across Bloomberg UK's newsroom have taken a crack at it. From the big issues facing Rishi Sunak to Cornish lobster, our experts below cast their predictions for what's coming in the year ahead.
And, if you want to see how well last year's predictions fared before going onto this year's, we have that covered, too.
Here are our predictions for 2023. A version of this first appeared in The Readout with Allegra Stratton.
“European governments will struggle to maintain the same level of energy subsidies as they did in 2022, which perversely may mean that even if wholesale prices drop, retail prices may remain as high, or even higher, in 2023 than in 2022.”- Javier BlasBloomberg Opinion“I've been surprised at how long it took the UK government to take the energy crisis seriously. Help only started for households in October and will be scaled back in April meaning higher bills. It's hard to see the situation improving by next winter – Europe is already bracing for at least another year of high prices, and it's not clear how the Prime Minister plans to deal with this in Britain”- Rachel MorisonTeam leader for gas, power and renewables in Europe
“While Christmas won't be as bad as expected, next year could be much worse.
Heating bills will land in January alongside credit card bills, while mortgage costs will intensify. Unless inflation starts to come down, I would not be surprised to see a sharp contraction in spending as the year progresses. It could be reminiscent of 2011, when VAT rose, and spending fell off of a cliff.”- Andrea FelstedBloomberg Opinion
“After such a turbulent year, it now feels like a return to boring day-to-day politics, pitting two intelligent, details-driven technocrats against each other in Rishi Sunak and Keir Starmer. After re-establishing Labour closer to the center ground of British politics, Starmer's challenge in 2023 is to come up with some policies that proves the opposition party truly is electable again. Sunak's in-tray includes finally resolving the impasse with the EU over post-Brexit trading arrangements in Northern Ireland, dealing with a restless workforce that's increasingly resorting to strike action as pay fails to keep pace with rampant inflation, and helming the nation through a looming recession. And much like Starmer, he has to prove that his hopelessly divided Conservative Party is electable again in time for an election that's widely expected in 2024 and has to be held in January 2025 at the latest.”- Alex MoralesUK politics editor“Next year there are big questions facing Rishi Sunak. The consensus appears to be no election until 2024, but that leaves him limping on with little prospect of building momentum through some dark economic days. He's struggling to show he has a mandate with his party, let alone the country — though the Tories will pretend Liz Truss's short-lived efforts to rip up their 2019 manifesto never happened. There are no good options — polls suggest an early vote would condemn the party to a landslide defeat, but will hanging on make things any better?”- Stuart BiggsUK politics editor
“I'm on the lookout for Keir Starmer to try and recreate some of the cultural groundswell of enthusiasm for a Labour government that Tony Blair managed to create in the mid-1990s.”- Kitty DonaldsonUK politics editor
“Whether Sunak can turn around the Conservative Party's dire poll ratings and actually get anything done in Parliament. His administration has been lacklustre so far and he's got a large rump of free-spirited, ill-disciplined MPs ready to block any contentious legislation.”- Joe MayesUK politics reporter
“Ukraine has in recent weeks and months won back much of the territory Russia occupied in the early stages of the war. If that trend continues into next spring and summer, the most interesting thing to watch out for in 2023 is how Vladimir Putin loses and handles defeat.”- Alberto NardelliCorrespondent-at-large for Europe
“How the UK deals with pay disputes, industrial action and its crumbling public services at a time of huge fiscal tightening will directly affect millions of workers, businesses and families. Overseas, it's hard to look beyond Russia – the source of so much instability – and China – which could ease global supply chain problems if it finds a path out of Covid Zero.
Right now I'm also a bit obsessed by the AI chatbot, ChatGPT, that's picking up steam on social media. It's pretty clear this technology will change our world. In 2023 we might start to realise how.”- Adam BlenfordSenior editor
“Two things I'm watching with interest next year will be Keir Starmer and the London housing market.
With a 20-point lead in the opinion polls, and the Tory government on its last legs, it's going to take a monumental collapse for Starmer NOT to be the UK's next leader. So how does he play that? At the start of this year, he was being talked about as more of a Neil Kinnock figure than a Tony Blair, a figure to set the party straight after the damage created by a left wing predecessor. Now he's prime minister-in-waiting. But there are still lots of questions over how he gets from here to election day. How will he approach the budget deficit? How will he react to the Tories stealing his policies? and most of all, how will he avoid screwing it up? I'm betting there will be one major wobble but he'll get there in the end.
The London housing market has been a one-way bet for as long as I can remember. Even after the financial crisis, it barely paused for breath while the rest of the world retrenched. But now it faces a unique set of challenges, it's not just rising interest rates and recession, but the waning power of the City and the problems facing the rich Russian who drove so much of the higher end. Bloomberg Economics says prices could drop 20%. I struggle to see it - the British establishment is just too invested in keeping the show on the road - but I would expect some increasingly exotic efforts from the government to prevent the whole thing unraveling.”- Ben SillsManaging Editor for European Economy and Government
“Housing may prove one of the most interesting stories for 2023, with growing expectations for a substantial drop. The Office for Budget Responsibility expects a 9% decline, and Bloomberg Economics says the market may be as much as 20% overvalued. That could have a big impact on the economy, since property prices feed personal wealth and how confident consumers feel to keep spending.”- Reed LandbergU.K. Economy Team Leader
“I think the most important economic variable, both in the UK and abroad, will be unemployment. That will be key to the severity of any recession, and also to what happens with house prices. If unemployment remains low, people will continue spending even in the face of a cost-of-living squeeze, and the housing market won't see many forced sellers. If unemployment rises significantly, the economy will be in a lot more trouble.”- John StepekSenior reporter, Money Distilled newsletterRishi Sunak's growth plan. Business groups say the government has not got one, and the last 'Growth Plan' - former chancellor Kwasi Kwarteng's - nearly blew up the economy. Which sets a high bar for excitement levels and at least proves a plan can have an impact. Sunak, a Silicon Valley acolyte, believes in tech, ideas, innovation and capital. Thrilling stuff, but he might be get bigger rewards simply by delivering on his promise to get the Northern Ireland protocol fixed. - Philip AldrickUK economics editor
“It sounds utterly boring, but bank impairments will be interesting to watch. This is where lenders put cash to one side if they're worried that people and companies won't pay their debts. It could start to become an interesting indicator of the effect rising interest rates are having on borrowers.
In terms of stocks, I think UK homebuilders have fallen too much. The share prices are telling us there will be a sharp decline in property values and builders will have to write down the value of the land they own. That seems extreme, but on a personal note I kind of hope it's true as I want to buy a flat next year.”- Joe EastonUK stocks editor
“Another Elon Musk hobby, specifically the SpaceX dearMoon mission partially funded by Japanese e-commerce billionaire Yusaku Maezawa. The plan is to send a group of artists on a spaceship around the moon next year, which sounds so crazy it might actually happen.”- Conrad Quilty-HarperUK digital editor
“Every year is the year of no waste and upcycling but I'm very excited to see what producers will do with items that generate a lot of by-products, like the pulp from oat milk production. I'm also psyched to see how restaurants are emphasizing locally sourced products. For instance at Dinings SW3 the chef Masaki Sugisaki, a sushi expert and Nobu alum, highlights fish from nearby places like lobster from Cornwall and sea bass from Wales, rather than bringing it all in from Japan.”- Kate KraderFood editor
“Global climate politics will get harder still. The UAE hosts the next COP in Dubai and will be desperate for the diplomatic kudos of a successful summit, but the going will be very tough: Europe is frustrated by fossil fuel producers fending off tougher emissions targets; poorer countries want the cash they've been promised; and Joe Biden will be less than a year away from a tough re-election battle.”- William KennedySenior Executive Editor, Energy and Commodities.
“As a lapsed Manchester United fan, the idea of the club being sold by the Glazers is fascinating. Who buys it, how much they pay and how the fans react will tell us a lot about the direction of big football for the next few years I reckon — if a deal is done.”- Neil BrennanUK social editor.
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