Niels Bohr, the Danish Nobel laureate in physics, once quipped that ‘prediction is very difficult, especially if it’s about the future’. With this in mind, and on the understanding that time is arbitrary anyway, I thought I’d make my own predictions piece this year about the past. Stranger things have happened in Mortgage Solutions, I’m sure. So here goes…
In 2015, I predict Leighton Aspell will win the Grand National for the second year in a row on a 33-1 shot called Many Clouds (get your money on it, dear reader, before the odds shorten); that the Tories will shock the polls at the General Election; that the Springboks will be stunned by Japan at the Rugby World Cup; and that Jeremy Clarkson will chin a producer in a fit of pique and get fired from the BBC, only to land on his feet in spectacular fashion. Time alone will tell if I’m right.
Joking aside, I suppose the point I’m trying to make is that predictions really are a load of old codswallop. And yet despite this, we’re bombarded with them each and every festive period. Take interest rates for a start. Over the Christmas holidays a year or two back while Mrs Doubtfire flickered in the background, I can remember reading, through port-clouded eyes, that interest rates would, with absolute, cast iron certainty, be rising in 2015.
In the event, the Bank of England has been so worried about China’s impact on the UK economy that the prospect of a rate rise this year wasn’t so much kicked into the long grass as hoofed into the next field. What we’re being told now is that that any rate rise is likely to stay off the table until deep into 2016, and possibly even 2017. And so the cycle of predictions starts all over again!
You know, I have a theory of my own in relation to the timing of interest rate rises — and the economy as a whole. In fact, it’s the only prediction I will stand by. It’s that, if we collectively spent the time we wasted on unnecessary forecasting doing work that has a real economic value, then we would add roughly 0.9% to UK GDP each year.
As a result, the economy would grow strongly and would enable the Bank of England to actually raise rates rather than speculate about it in the form of the officially recognised gobbledegook that is forward guidance.
Anyway, to all Mortgage Solutions readers, have a very Merry Christmas and a Happy New Year!