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Last Updated: Friday, 19 December, 2003, 08:03 GMT
Randall: What to expect in 2004

By Jeff Randall
BBC business editor

A favourite trick of journalists at this time of year is to ask a few celebrities to make some predictions for the coming year and then hold them up for ridicule 12 months later when none comes true.

But here at the BBC, we champion balance and fairness, so in the spirit of the festive season these are the business editor's half dozen predictions for 2004.

I will, of course, expect no mercy from cynical readers when my crystal ball proves even less reliable than the BBC's power supply.

1. Telegraph battle

Forget Eastenders and the Archers, Soap Opera Of The Year will be the battle for control of Telegraph newspapers, as Lord Black's problems deepen at Hollinger. Titles of such prestige and commercial value come on the market once in a blue moon, so the bidding is expected to be hot.

The Daily Express's owner, Richard Desmond, though dogged by his reputation as a pornographer, is in pole position.

He already owns half of Westferry, the printing operation that produces the Telegraph, and if the newspaper changes hands he holds pre-emption rights on the other 50%.

For other would-be bidders for the Telegraph, Mr Desmond's contract represents a highly toxic "poison pill".

2. Debt trouble

Rising debt, both individual and governmental, will increasingly undermine economic confidence.

British consumers are living in a never-never land of very high personal borrowings.

They simply cannot carry on spending more than they are earning without a hard landing.

Barclays Bank's cautious and conservative approach to further consumer lending will be proven correct.

By contrast, Royal Bank of Scotland, which continues to be more aggressive, will start to encounter rising problems with delinquent borrowers.

The chancellor has recently been forced to readjust sharply his own borrowing figures, as government spending, especially on health and education, outstrips tax revenues.

Some City economists calculate that Gordon Brown's forecast of 31bn for next year is too optimistic and that 37bn is more likely.

3. US economy

George Bush, despite suffering a serious wobble in recent polls, will be returned to the White House.

The capture of Saddam Hussein will prove to be an enormous boost for the hawks in US government.

America's economy has returned to strong growth, and the sharp fall in the dollar will help US exporters.

But not all American companies will enjoy the fruits of recovery.

Ford in particular will continue to suffer as Bill Ford struggles in vain to rejuvenate the business that bears his family name.

4. Stagnant stocks

Having enjoyed growth of about 10% since the start of this year, the UK stock market will drift sideways in 2004.

Those forecasting a quick return to the bull market of the late 1990s will be confounded.

London's FTSE 100 index peaked at 6,900 at the turn of the millennium.

It would take another five years of 10% compound annual growth for that level to be surpassed.

Highly unlikely. My prediction is that we'll not see a new peak for at least 10 years.

5. Bankrupt football clubs

An English Premier League football club will go into administration.

While plenty of clubs in England and Scotland are already operating under administrators, a top-flight club has yet to fail.

But such now are the money pressures on some of the financially weaker teams, it is only a matter of time before a big name goes under.

Football's debts accumulated in the go-go years of the late 1990s, when some clubs foolishly thought they could replicate Manchester United's highly successful business model, combined with the game's dearth of high-quality commercial managers is a corporate accident waiting to happen.

6. Guinness cheer

The greatest number of pints of Guinness ever sold at a single event will take place on Wednesday 17 March.

Why? Because in 2004, St Patrick's Day happens to fall bang in the middle of the Cheltenham National Hunt Festival, the pinnacle of the jump racing season.

Cheltenham houses a massive Guinness enclosure that even on a normal day, if such a thing exists at the Festival, pours out gallons of the black stuff to thirsty race goers.

This year's celebrations for an Irish winner promise to be wilder than ever.


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