1) Holidays will get cheaper
HiFX, one of the largest currency and international money transfer companies in the UK, predicts that sterling will continue to rise against many currencies this year. This will make holidays cheaper for many of you (depending on your destination country). It will also be beneficial for anyone sending money overseas, particularly to the Eurozone, which is good news for pensioners that live abroad and other owners of overseas properties.
2) Car insurance will be driven down in price
The cost of driving is predicted to start to fall this year following an announcement by the DVLA that it is moving all driving records online. The migration is taking place in phases throughout the year and should be completed in the first half of 2015. It is expected to knock £15 a year from the cost of car insurance cover.
3) Mobile phones will get cheaper
All the smartphone manufacturers will bring out a new device this year, according to Rob Hodges at mobile comparison site e2save.com, which means every current smartphone in the market will have its price slashed in 2014. He is also predicting there will be a price war on 4G, now that the four major players can all offer 4G to their customer base, and that using a mobile phone abroad will get cheaper thanks to new EU caps on charges for data usage.
4) Interest rates will remain low
Economists widely expect that interest rates will remain at their record low this year, and won’t rise until at least the second half of 2015. More than 98% of 28 economists polled by the BBC expect interest rates will still be at 0.5% at the end of 2014, which is good news for everyone on a cheap mortgage tracker rate, although savers will continue to suffer.
5) Unemployment will fall
Unemployment is expected to continue to fall this year. For example, the investment bank Goldman Sachs has predicted it will drop from its current rate of 7.5% to between 6.5% and 7% by the end of the year. However, like most other commentators, the bank does not expect interest rates to rise until mid-2015, even though the Bank of England has warned that interest rates could start to rise if unemployment falls below 7%. It is felt a sudden leap would jeopardise the fragile economic recovery.
6) House prices will rise
House prices will rise by 7.5% in 2014, according to Halifax. While this is good news for homeowners, it is bad news for struggling first-timers. On the other hand...
7) It will get easier for first-time buyers to get a mortgage
The government’s Help to Buy scheme is picking up pace, with more lenders joining every month. Already, it is much easier to get a mortgage with a 5% deposit, and this trend is set to continue in 2014. What’s more, mortgage rates at this level of borrowing should become even more attractive in 2014, as competition among lenders heats up. All this is, of course, great news for struggling first-time buyers who are finding it difficult to save for a deposit.
8) Energy bills will fall
The government’s decision to remove green levies on gas and electricity bills is widely expected to cut energy bills by £50 a year this year. Already NPower has announced it will reduce the average customer’s bill by that sum, with a £38 cut on 28 February and a £12 government rebate in the autumn.
9) The economy will grow at a healthy rate
The UK is now officially on the road to recovery – the Office for Budget Responsibility has predicted that the economy will grow by 2.4% in 2014, and other commentators such as the Confederation of British Industry and Goldman Sachs broadly agree. The British Chambers of Commerce is also predicting the economy will grow at a faster rate in 2014 following a survey of 8,000 businesses, which found that confidence is high, and other key economic measures are even more positive than they were pre-crisis in 2007.
10) There will be ‘positive’ stock market surprises
According to Nancy Curtin, spokesperson for Close Brothers Asset Management, we are finally over the worst of the financial crisis. In fact, she says, “2014 could be the exact opposite of 2008, with negative ‘event risk’ shocks being replaced with positive surprises (such as European banking union) that may add further propulsion to economic growth.”
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