After the shocks of 2016 it is not surprising that relatively few have sprung forth with confident predictions for the New Year. Yet apprehension over the future is high as the repercussions of the past 12 months play themselves out in the period ahead.
It is not difficult to list reasons to be fearful. Yet financial markets in America and the UK saw in the New Year with record highs. Business senses opportunities ahead under a Trump administration pledged to boost federal government spending on infrastructure projects and tax cuts for households and firms alike. And here in the UK, estimates for third-quarter growth have been revised up to 0.6 per cent quarter on quarter, while household spending has been boosted by high employment and a continuing if modest growth in real incomes. Thus, while a notable slowdown is expected over 2017, the dire predictions of recession in the wake of the European Union referendum vote have proved overdone and we are starting the New Year from a firmer base than many had dared hope.
That said, major uncertainty persists over Brexit; the calls by First Minister Nicola Sturgeon for Scotland to remain in the Single Market and more broadly whether the EU and EU member countries can agree a mutually beneficial trading relationship. While lack of detail is frustrating, there is a notable mood across the business world to make the best of our situation and get on with the job. The fall in sterling offers opportunities for UK firms to boost exports and for many of Scotland’s smaller businesses in the food and drink sector to build a presence in overseas markets. Meanwhile our tourism and events sector, spanning hotels, hospitality and conference catering, stands to benefit.
There is also a sense that in 2017 attention will now come to bear on the detailed practicalities of change, with the focus on legislation and unglamorous hard grind. However, we also face an elevated degree of geo-political risk. The weekend brought a horrific reminder when in Istanbul a gunman opened fire at a crowded nightclub, killing at least 39. Officials have said that 15 foreigners died.
This barbaric attack cannot but heighten tensions across the region and add even further to security precautions being taken in European capitals.
Fear of further such attacks, possibly including, as UK security minister Ben Wallace warned yesterday, the use by Islamic State of chemical weapons, will add further to the growing voter mood of unease across Europe that is already threatening to bring major election upsets in France, the Netherlands and Germany.
Meanwhile, North Korea has taken another step towards long-range nuclear strike capability with the country’s leader Kim Jong-un claiming that the country is now close to testing long-range missiles capable of carrying nuclear warheads.
These are reminders, if any is needed, that a febrile and apprehensive 2017 will pose challenges as big as anything we faced over the previous 12 months.