How will Scotland fare in 2011?

How will the economy fare, what will happen when Scotland goes to the polls and where will technology take us? Our experts reveal their predictions for next year

ECONOMY by Nathalie Thomas

LET'S start with the good news. Scotland, like the rest of the UK, will enter 2011 in recovery. That's already a better position than the one we found ourselves in last year as the British recession was not called to an official end until the final days of January.

We have so far avoided the dreaded "double dip" recession and economic growth actually took many by surprise in the first nine months of 2010, exceeding forecasts.

Bailed-out bank Lloyds Banking Group is back in the black (as was Royal Bank of Scotland for a brief period) and certain parts of the economy are firing on all cylinders.

Manufacturing – a sector which many had long since given up on – is, for example, making a comeback.

The oil and gas sector is also enjoying a resurgence with a number of North Sea firms taking the stock market by storm.

The good times are similarly here again in Scotland's food and drink sector, fuelled by wealthy drinkers in areas such as Asia who have developed a taste for Scotch whisky in particular.

The latest jobs figures indicate Scotland is doing well compared to the rest of the country, with unemployment falling by 5,000 in the three months to October while the overall UK unemployment jumped 35,000 during the same period. A number of big names such as Deloitte, Tesco Bank and Ernst & Young are all recruiting in Scotland.

Unfortunately the good news stops there. The list of negatives as we go into 2011 still heavily outweighs the reasons to be cheerful and those hoping that the dark days of the recession and the banking crisis are now far behind us may find themselves feeling bitterly disappointed.

Even the most optimistic economists warn that both the Scottish and UK economies have still not cleared the danger zone.

Dougie Adams, an economic adviser to Ernst & Young north of the Border, summed it up when he said Scotland's economic journey in 2011 is likely to be "joyless" and "jobless".

Only the biggest doomsayers dare speak of a plunge back into recession but there are some major question marks hanging over the recovery.

The first is Europe. While all may be quiet on the European front for now, no country with economic ties to the Eurozone is popping the champagne corks yet. The recent 86 billion euro bail-out of Ireland has averted any immediate threat but economists are keeping an eagle eye on a number of other troubled economies, including Spain, Portugal, Belgium, Italy and even France.

The European Union has the funds to bail out one or two more of the smaller Eurozone economies but if a country as large as Spain goes cap in hand to the EU, then we could all be in for a rough ride. The consequences of a Eurozone collapse are almost unthinkable: it would certainly trigger another banking crisis and some even whisper of a second global downturn.

Another big "if" hanging over the Scottish economy is employment. As the full horror of the government spending cuts filters through the system, the public sector is not going to be a joyous place this year. It is predicted that 40,000 jobs will be lost from the public service over the next five years and while companies big and small should be generating jobs, it's unlikely the private sector will be able to pick up much of the slack. The young are particular victims of the rising unemployment – according to the Royal Bank of Scotland the number of 16 to 24-year-olds claiming unemployment benefit for more than 12 months has increased fourfold since before the recession. Could 2011 be marred by sorry tales of a so-called "lost generation" of young people? Very possibly.

And then, of course, there's the weather.

It has been calculated that Scotland could lose as much as 20 per cent of GDP a day as long as the snow and ice continue to control business activity. For the high street in particular, wintry conditions well into the new year could potentially spell disaster.

Retailers are hoping that strong Boxing Day sales will go some way to making up for the havoc wreaked by the snow on some of the busiest shopping days of the year – particularly on "super Saturday", the last Saturday before Christmas, when shops would usually expect to make a week's worth of sales in just one day. But economists are unconvinced that even record post-Christmas sales will recover the damage.

What will happen after 4 January when VAT rises to 20 per cent from 17.5 per cent is even more worrying.

As one retail expert, Martin Carr of Erst & Young said: "After 4 January everyone looking at UK retail will say it's going to be a very tough start to the year."

Market analysts are already teed up for a number of big names in retail to issue profit warnings early next year.

Another serious grey area is the public purse. Although the coalition government's first budget and spending review set out a no-nonsense approach to cutting Britain's budget deficit, worrying signs have emerged that everything may not be going to plan – already.

Public borrowing soared to a record high of 22.8 billion in November despite the government's ambition to almost eliminate Britain's deficit by 2015. The shock figure has shed doubt on whether David Cameron's government will meet its first deficit reduction target, which falls at the end of the fiscal year on 31 March.

While there's a chance the November sum could be a rogue one-off event, it wiped out almost all of the savings made since April and plants yet another seed of doubt in the minds of politicians and economists who will next year be tasked with navigating the UK economy into far safer waters.

As Howard Archer, an economist at IHS Global Insight, put it: "This is dire news for Chancellor George Osborne to digest over Christmas. There is now a very serious risk that the government will miss its fiscal targets for 2010-11."

A happy New Year for the economy? It's unlikely.

POLITICS by Eddie Barnes

THIS time last year, few had the foresight to predict that, 12 months on, a Conservative-Lib Dem government would be running the country, and that Labour would be run by the younger Miliband. Looking forward to next year at least one thing is certain: political events will continue to take place underneath the shroud of economic uncertainty. More than ever, it is the economy, stupid, which matters.

In Scotland, the great budget squeeze will dominate all debate ahead of the big date on the political calendar, 5 May, when Scotland goes to the polls for the fourth Scottish Parliamentary elections. That debate kicks off next month when Finance Secretary John Swinney will reveal how he intends to divide his ever-reducing cake for 2012 to 2014. It will continue through crucial GDP figures which will reveal whether Scotland has sunk back into negative growth. And it will form the sub-text in every paragraph of the party's manifestos in April which will have to be distinctly circumspect about what the goodies they can offer. The likelihood is that the parties will indulge in a phoney war ahead of the elections, with neither of the Big Beasts, the SNP or Labour, willing to tell the Scottish patient how much medicine they require. Alex Salmond plans to put the constitution front and centre of the campaign, hoping to point out how independence offers a better alternative to a declining Union. Iain Gray will concentrate his fire on the Nationalists' record in office. The bookies say Gray will beat Salmond in terms of seats won. But as to what happens in the post-election bun fight, all bets are off. A Labour-Lib Dem deal is being talked up if the numbers add up. One of the more tantalising questions, however, is whether the SNP and the Conservatives will do a deal based on their over-riding common purpose: keeping Labour out.

As ever, however, Scottish politics will be informed by events in the UK as a whole. As they left for a brief Christmas break this week, the coalition deal between the Lib Dems and the Conservatives was looking more and more fragile. And in 2011, yet more flashpoints are waiting.

There is the current dispute over bankers' bonuses which sees Vince Cable and George Osborne at loggerheads. There is complete disagreement over Ken Clarke's "prison doesn't work actually" criminal justice policy. There is Europe. Most of all, however, there is the referendum on voting reform, also to be held on 5 May. If people reject any reform, the internal pressure on Nick Clegg over what exactly the Lib Dems are doing in power with the Tories will become intense – and there are plenty of people in both parties who would be happy to see the coalition fall to pieces. The straw that breaks the camel's back could be Scotland, if the Scottish Lib Dems, led by Tavish Scott, get walloped. Another UK election in the next year is quite easy to imagine.

Other big dates include the 26 March Hyde Park union rally against spending cuts which may end up dwarfing the anti-tuition fee protests held earlier this month. They come with Union leaders promising co-ordinated strike action throughout the year against the coalition's spending cuts which kick in in earnest at the beginning of April. The coalition government will be hoping desperately that by this time next year, there are clear signs that UK Plc is turning the corner, and that there is something to leaven the pain of cuts.

That's if they make it that far. First things first, there is the Oldham East and Saddleworth by-election in two weeks' time. In the current febrile political climate, there is little point looking much further ahead than that.

WORLD POLITICS by Tom Peterkin

THIS summer Barack Obama hopes that the start of the withdrawal of US troops from Afghanistan will give his presidency a much-needed boost.

Who would have thought amidst the euphoria and hope of his election in 2008 that Obama would have had such a tricky couple of years as America's first black President?

Still struggling domestically from the disastrous "shellacking" of his party in the November 2010 mid-term elections that saw the Democrats lose control of the House of Representatives, much now rides on how he performs on the foreign stage.

July 2011 is when Obama has said that US troops will start moving away from the conflict.

How many troops can be withdrawn depends very much on how the conflict is perceived to be going. The President has been criticised for broadcasting a withdrawal date, with his critics claiming it has emboldened the Taliban. Anything other than a significant movement of troops away from the war zone will cause problems for a politician who looks as if he has to redefine his presidency in much the same way as Bill Clinton did after a huge Democratic defeat in 1994. Doing that is a must for Obama if he is to shake-off the mid-term blues.

As ever, the performance of the economy will have a major impact on his popularity.

On that front, Obama faces a major challenge as the economy looks set to struggle against enormous national debt and a further decline in living standards.

With the arithmetic in Congress finely poised, Obama has to master the art of compromise to make progress in a political landscape that has even seen the Tea Party come into the fold of the establishment.

Creating jobs and stimulating demand is the domestic economic challenge for Obama. But as an established, yet waning, economic superpower the US has to deal with the competitive challenge presented by the emerging economy of China. That is why the mood music emanating from President Hu Jintao's visit to the US in January is so important.

Closer to home in the Eurozone, the economy is also the dominant force. In Ireland, Brian Cowen's days as Taoiseach look numbered with the country heading for the polls in early 2011.

His Fianna Fail-led administration looks set for defeat from a Fine Gael/Labour partnership. Whether a fresh coalition can take the action needed to sort out a deeply wounded Celtic Tiger remains to be seen.

Elsewhere in the Eurozone, Spain has to call an election by March 2012 while Italy looks as if it is heading for an early election. With elections over the horizon it is difficult to see political parties embracing the difficult cuts required to clamber out of their deficits.

Nevertheless, the reality is that unpopular policies are required, so we can expect more unrest across Europe in protest at austerity measures. In France, President Nicolas Sarkozy, in the year of his G20 presidency, has to re-establish his credibility in time for the 2012 election following his confrontations with the trade unions.

Further afield in Saudi, the fading health of the octogenerian King Abdullah and that of his son Crown Prince Sultan bin Abdul Aziz has raised the prospects of uncertainty in the oil markets. If, as many people think, the current interior minister Prince Nayef comes to throne, much depends on how this deeply conservative character behaves and is received by the rest of the world.

As ever in a turbulent world, it is inevitable that violent trouble spots will emerge. The first fatal bombing by a suspected Islamist militant in Europe since 2007 recently took place in Sweden, acting as a grim reminder that terrorist attack remains a threat.

In the Middle East, tension remains high with Israel growing increasingly edgy about Iran's attempts to build atomic weapons. Meanwhile a breakthrough is required if the current deadlock in Israeli-Palestinian peace talks is to be overcome.

LIFESTYLE AND FASHION TRENDS 2011 by Latifa Akay

Projectors take over the show

Not long ago projectors looked a lot like old technology. The ones used to show football matches in pubs were of poor quality. And the very idea of a projector seemed to come from a bygone age of amateur cine enthusiasts – the very antithesis of the digital revolution. Well, no longer. Technology has caught up with the humble projector. Now their quality is so high they are a very real alternative to a big-screen TV for those seeking out the best home cinema experience. There are also models that are so small they can fit into a pocket. Now you can be in complete charge of your PowerPoint presentation at work – or an impromptu video show for the neighbours about your holiday in the Algarve.

Personality Plus in the workplace

"We continue to shape our personality all our life. If we knew ourselves perfectly, we should die." This was the declaration of French philosopher Albert Camus. In an age when many people present different versions of themselves in different environments, Camus is, of course, correct. Futurologist Richard Laermer however foresees that in the near future workers will no longer need to maintain two personalities; one for the office and one for outside the workplace. Instead, the new decade will harness the need for work/life personality balance. As workers look for careers to match their personalities, the right position at the right company will allow employees to work within their type. What a relief.

The Retro/Techno Compromise

Retro lovers who don't mind a bit of new technology are faced with a conundrum. To which candlelit corner do you confine the tiresome sparkle of a new Ipad or similarly shiny device? Enter items such as the V-Luce Ipad Stand to put an end to those sleepless nights of 21st-century worry. This clever piece of equipment, designed by Paula Anne Patterson, takes inspiration from the wood-grained black and white televisions that were popular in the oh-so desirable 50s. The V-Luxe stand will fit your Ipad in landscape mode and also provides storage space in which to house any unsightly speakers or wires. A concept in process, 2011 promises to make more such prospects of retro/techno compromise a reality. Watch this space.

Social Networks can save the world

We all know that social networking carries certain potent powers; amassing fleets of ego-boosting followers and "friends", bringing down the iron fist of the law, connecting you with the un-connectable and so on. It can also, seemingly, do some good as well. Facebook co-founder Chris Hughes has just launched Jumo, a non-profit social networking platform that allows people to connect with charitable and non-profit organisations working towards a good cause. With a simple and easy-to-navigate user interface, the search bar anticipates what you're looking for and offers a list of organisations matching your entry. Users then have the option of connecting with three different categories; people, projects and issues. Only time will tell whether or not the venture takes off. However, with Facebook (now being called the third most populous nation in the world) running the show, it seems safe to bet it will. Social networks stimulating social change? Really, whatever next.

latifa akay

What walls will be wearing

If you're heading down to B&Q for some paint for the living room next year, the only colour you want to come back with is PANTONE 18-2120, otherwise known as Honeysuckle. This vivid shade of reddish fuschia/pink has been picked by Pantone as the one to watch for the next 12 months, and is a big improvement on 2010's PANTONE 15-5519 (that's turquoise, in case you were wondering). It won't just be for walls, either. Any household appliance or piece of soft furnishing you intend to buy in 2011 will have to be this colour too. "In times of stress, we need something to lift our spirits. Honeysuckle is a captivating, stimulating colour that gets the adrenaline going – perfect to ward off the blues," explains Leatrice Eiseman, executive director of the Pantone Colour Institute. "Honeysuckle derives its positive qualities from a powerful bond to its mother colour red, the most physical, viscerally alive hue in the spectrum." Well, when you put it like that...Fruit Pastille Fashion

What do Michael Kors, Calvin Klein, Jil Sander, Max Mara, Prada, Gucci and Zac Posen have in common? They are all doing neons and fruity colours in 2011. Whether it's a searing citrus orange or a tangy lime green, it's the one trend you'd be bananas to miss. It'll be particularly successful in shoes, if you need an excuse to go out and buy a new pair.

Cat Eye Sunglasses

For those of us partial to the odd feline friend, the occasional desire to look like a cat is not unusual. Options include the donning of ghastly cat ear hair-bands, the scrawling of whiskers upon one's face with eye-liner prior to a night on the town OR ... cat eye sunglasses. Spring 2011 will open a window of opportunity to turn the clocks back to the 50s when cat eye sunglasses were the absolute must-have accessory to complete any classic attire. A surprisingly diverse range of futuristic feline frames are available on the market. With Jessica Alba, Mary-Kate Olsen and Scarlett Johansson all fans of the feline femme look, rest assured you will be in good company. Meowing optional.

The Pixie Crop

2011 ties into the general theme of 70s revival to bring us yet another evolution of the classic pixie crop. Influenced by figureheads such as our favourite girl-wizard-turned-fashionista Emma Watson, the pixie crop of the coming months promises to be a shorter one than the one that appeared in 2010. With short sides and slightly longer top and fringe, hairbrushes can be banished to the back burner along with any other cumbersome, unsightly hair accessories. For those apprehensive about confining themselves to life as a fringed woodland figure, fear not, versatility is in. A short crop can be styled up or back a la Rihanna, worn with curly or straight hair and will certainly fare well in the rain. If X Factor's Katie Waissel can do it, we all can.

Biker Fashion

Once the preserve of long-haired men and short-haired women, biker fashion will leapfrog old-time favourite military wear in the 2011 trend tables. Promoters of the biker chic movement include Burberry, whose spring/summer 2011 collection "Heritage Biker" is dominated by zippered leather delights. But don't worry – it isn't all black. Christopher Kane's biker pants are striking in neutral tones with additional glinting gun-metal pieces for extra eye-catching appeal. We very much recommend you retire the fraying laces of any generic military footwear circa 2009 and set upon the task of sussing out the perfect biker boot in all its buckled glory before the mainstream gets wind. Sophisticated grunge is back. Do you feel empowered? Well you should.

OTT Rings

The news we have all been waiting for – knuckle dusters are back in vogue. And yes, the more rings you can carry on a finger the better. Yves Saint Laurent have an impressive collection of striking knuckle wear lined up for the new year; indulgent varieties of polished glass stones, texturised finishes, floral embellishments, gold and silver plating and designer stamps all present and correct. If this is your cup of tea, by all means invest.

Puff Pieces

With all the fuss about skinny models and twiglet legs, many will be glad to see a bit of shapeliness on the catwalk, albeit in the form of jackets. Yes, from Giles to Giambattista Valli, designers are embracing (quite comfortably we imagine) this extravagant Italian trend. However, if you're envisaging a frightening influx of Michelin men, fear not, versatility is in and trends range from metallic gilets to oversized silk down jackets. The risk is, of course, that you will end up resembling a walking marshmallow or pumpkin. Minimalism is therefore the answer; if you are puffing on top, do be sure to indicate the shape of your legs below. Similarly, bracelet sleeves, which elegantly expose the wrist, act as a subtle reminder that below the puff there is sophistication and well, shape. Most inflated style of the season? We think so.