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2014: What the year ahead has in store

The past year has been turbulent. Growth has been disappointing, and forecasts have not been met. Tapering in the US was one of 2013’s biggest stories, with analysts predicting when the US Federal Reserve would begin to scale back its quantitative easing (QE) programme.

Of the US, Alan Levenson, chief economist at T. Rowe Price, said, “The economy should gain momentum next year, with housing construction likely to pick up. The impact of political uncertainty in Washington should be less than it was this year, once we get past the January sequestration talks and the focus turns to elections.”

Europe was one story that would not go away. But it was a year of two halves for the continent. Starting off in recession, weak signs of recovery eventually turned into growth towards the end of the year.

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Neil Williams, chief economist at Hermes Fund managers, said the irony remains that QE is being done least where it is needed most – the eurozone.

“We doubt any sudden volte-face from Germany on fiscal and banking union and are more concerned about Spain’s dilemma, which risks funding strains and/or social unrest. Greece will have to get more, Cyprus’ terms want reviewing, and Portugal needs to extend its existing bail-out beyond mid-2014. So, restructuring risk is not yet removed – no matter how punctuated the eurozone’s recession,” he said. See page 42 for more on opportunities in Europe.

Elsewhere, before it starts to get confusing over the next two years, all firms with more than 50 employees will have had to introduce an auto-enrolment pension scheme by 1 July. The next two years will be dedicated to smaller employees, organised by PAYE reference numbers.

The mortgage market will also come into the spotlight in the first half of the year. The majority of changes to the Mortgage Market Review (MMR) will come into effect on 26 April 2014.

Having been in the works since the regulator’s discussion paper in 2009, the MMR will finally come into full swing. Additionally, the government has decided the responsibility for regulating second-charge mortgages will transfer to the FCA as of April 2014.

The FCA will also celebrate its first birthday on 1 April 2014, so expect news of how much more it has done, compared to its predecessor, the FSA, then.