2024: Some Hesitant Predictions

I am not a soothsayer and therefore I do not really make predictions. What I do is to estimate the relative probabilities of expected future outcomes. As a “risk analyst” (though I don’t like that term) I admit that I have become sceptical about data disseminated by the mainstream media which expresses “the popular wisdom”. As regular readers will know, I believe that once an atom of wisdom has become “popular”, it is almost certainly wrong. I think it was legendary US investor Jesse Livermore aka the Wolf of Wall Street who said: “When the shoe-shine boy gives you a share tip, it is almost certainly time to start selling”.

My first observation, a known known about 2024, is that approximately two billion citizens will go to the polls across about 50 of the world’s roughly 190 territories and countries over the course of the year. I say a “known known” rather than a certainty because something could happen – another pandemic or a natural disaster, for example – causing one or more of those planned elections to be postponed. But, in principle, nearly one quarter of humanity will go to the polls. And I am not suggesting that the world is getting more democratic as some elections are (shall we say) less free than others. But there will be a high degree of political continuity (though not in the UK nor the USA). Many modern electorates are easily predictable. Putin will be re-elected as President of Russia and Modi will be re-elected as Indian prime minister in April.

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As I discussed two weeks ago, the timing of elections, where they are not pre-determined as in the United States, usually depends on prevailing economic conditions. I foresee that the global economy will escape recession next year, though global growth will continue to follow a downward trend, with China’s growth much inferior to that of India. In particular, the UK will escape recession – just; and the FTSE-100 index will touch 8,000.

The UK will have to confront is lacklustre growth record during the forthcoming British general election campaign (though I am not expecting a high level of debate). But, with inflation below three percent and with interest rates beginning to fall incrementally from the late spring onwards, Mr Sunak’s Tories will be able to argue that the corner has been turned and (to mix metaphors) the economic weather is brightening – even if a lot of people, especially mortgage holders, will still be feeling the pinch.

That is why Mr Sunak will want to delay the election for as long as he can – though it will be difficult for him, politically and tactically to delay it until the onset of winter. If he delays the election to beyond the late summer then a popular head of steam will build demanding an immediate vote, especially if the London mayoral and English Council elections scheduled for 02 May go badly for the Tories – as seems likely.

Therefore, I think it is likely that Mr Sunak will request King Charles for a dissolution of parliament before the party conference season (early October) comes into view – indeed, there will probably be no party conferences at all this year. But if he announces a dissolution during parliament’s summer recess, parliament would have to be recalled to endorse its dissolution, which would look messy. Parliament is due to reconvene on 2 September and my best guess is that the dissolution will be announced that week. That means the UK general election will take place on a Thursday about five weeks later. That would take us to Thursday, 10 October 2024. That is a day when there will still be over eleven hours of daylight in London (a bit less in Edinburgh), and the ambient temperature might be around 15 Celsius – neither too hot nor too cold to deter voters.

Mr Sunak and his Chancellor, Jeremy Hunt (who will still be in place), will argue that they have steadied the ship over the last two years and that they have navigated it around the rocks. They will still have failed to set out a vision of where that ship is heading; but many people will be feeling somewhat more optimistic about the future than at New Year. There will be some headline-cutting tax cuts in the Spring Budget to be held on 6 March which will go some little way to re-establishing the Tories’ tattered reputation as a low-tax party. There are even rumours circulating at New Year that Sunak-Hunt will abolish or drastically cut inheritance tax. Labour, of course, will characterise this as a tax give-away for “the rich” (even though the very wealthy don’t pay inheritance tax because they hold their wealth in trust).

Labour’s lead in the opinion polls will have narrowed somewhat by late summer. But the prevailing mood will be that a change of government is due. Even many natural Tory voters will agree that the Tories, in power for nearly 14 and a half years, do not really deserve to be re-elected. On the other hand, such “natural Tories” would rather have an appendectomy than vote Labour. So, much will depend on how much fear and loathing the Tories can generate about the terrible consequences of a Labour victory during the campaign. This may have the effect of stopping disaffected Tories from voting for the Reform Party, led by Richard Tice and, at one remove, by Nigel Farage.

Labour will win – but not as convincingly as Tony Blair’s New Labour won in May 1997. I foresee that the Tories will hold on to around 200 of their seats while Labour will be returned with more than 360 seats – the reverse outcome of the December 2019 election. The Red Wall will largely revert to Labour. Labour will also take between a dozen to two dozen seats from the SNP in Scotland. The Liberal Democrats will gain some seats from the Tories across the Blue Wall in Southern England (though I foresee that Amersham, where anti-HS2 sentiment was critical in their by-election victory in 2021, will revert to the Conservatives). That will be more than adequate for Sir Keir Starmer to form a majority government without the support of the Lib Dems.

The incoming Labour government will enjoy a very short honeymoon before the financial markets begin to stalk them. Labour will inherit precarious national finances and will have little room to manoeuvre. More well-heeled British taxpayers, including most of those who currently enjoy non-dom status will relocate overseas. Thus, it is likely that, under Labour, the UK tax base will erode further. There could very well be another run on sterling if Starmer-Reeves spook the markets – but not until 2025.

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And what about America – Donald Trump being the Republican elephant in the room? And indeed, what is happening to America? It has become a trope for fashionable historians to speculate on whether the American Republic is going the same way as the Roman Republic in the 20 years or so Before Common Era (BCE – which I still call Before Christ). Rome’s democratic, or rather oligarchic, system was suborned by a series of geopolitical and economic crises which, so it seemed, only a man of destiny could overcome. When Julius Caesar was assassinated by a group of die-hard constitutional purists on the Ides of March 44 BCE, that unleashed a civil war from which his adopted son Octavian (later called Augustus) emerged as sole autocrat. He appointed himself Imperator – Commander or Emperor. (The German word Kaiser and the Russian word Tsar are also so derived). Thus, Rome passed from a Republic to an Imperial monarchy even at the very height of its rhetorical (for which today read social media) energy.

There is now a powerful narrative on the American left to the effect that a Trump victory in the presidential election on 05 November 2024 will signal the end of democracy in the Great Republic. Many of them really believe this notion; others consider that it is a good tactic to scare people, given the incumbent president’s weakness. Many of these people also have an instinctive dislike for Britain – which is why the prospective US-UK trade deal is dead in the water. Most Democrats privately agree that Joe Biden is past his sell-by date; but it would just be too awkward to dump the Old Boy now – especially as there is no credible alternative candidate.

Right now, on New Year’s Eve, I would give Donald Trump a 55-60 percent probability of re-taking the White House, come November. But there are still a few curve balls in motion. One is that a number of states might follow Colorado and now Maine in taking the ex-president off the ballot sheet in accordance with an obscure constitutional amendment passed in the 1860s after the American Civil War. (To be precise, Section 3 of the 14th Amendment). This disbars people involved in sedition from seeking electoral office – and the events of 06 January 2021 when Congress was stormed by pro-Trump agitators are deemed by many to have been seditious – even though Trump has never been formally charged with insurrection.

Colorado’s decision is to be re-examined by the Supreme Court and its ruling will be momentous. Even third-party candidate Robert F Kennedy Junior has described the move to disbar candidates for political reasons as “rigging the primaries”. Some Democrats fear that such a legal tactic may be used against them one day. Another curve ball is that the various court cases pending against Donald Trump will inevitably drain time and resources from his campaign as the primaries unfold.

There is a smallish chance – probably no higher than 15 percent right now – that the Republican Party high command might yet see sense and admit that Donald Trump is last year’s man, even though he is overwhelming popular amongst registered Republican voters. They just might conclude that Nikki Haley is a competent and worthy contender who could not only knock Biden out of the ring but who would maintain America’s standing in the world. She carries no baggage.

We will probably know if this is possible early in the New Year. The Iowa Republican national caucus (primary) will take place on 15 January, to be followed by the New Hampshire Republican primary on 23 January. On Super Tuesday, 05 March, there will be nine state Republican primaries. So, by 06 March it will be game over and the world will know who the Republican candidate will be. Or will it? Trump will very probably emerge as the most popular choice; but if Nikki Haley comes a strong second and if Trump is in deepening judicial trouble things could get interesting.

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The world will be watching – not least from Kyiv. President Zelensky is beginning 2024 in a weakened position. Despite the sinking of a significant Russian naval vessel on Boxing Day (26 December), Ukraine is losing ground on the Eastern front. More importantly, the Ukrainian army is running out of men even as Russian forces are being bolstered with new recruits, even without a further mobilisation in Russia. The average age of a Ukrainian combatant is 41. Russia is not going to give up the territory it has seized; and the regime of western sanctions has not worked. Indeed, the Russian economy grew in 2023.

The question for NATO, and especially for Washington (which is the major supplier of arms to Ukraine) is whether it is strategically optimal to keep the war going indefinitely when some kind of deal whereby Russia keeps the occupied Ukrainian territories (including Crimea) is inevitable in the medium term. In fact – is it even moral? There have been hundreds of thousands of fatalities on both sides; Ukraine has lost population to Russia in the East; and millions more Ukrainians have fled, mostly to European Union countries and the UK – most of whom will never return. We can confidently suppose that there are already diplomatic exchanges underway in secret between Washington and Moscow with a view to concluding hostilities in a way that will allow Putin to declare victory and NATO to claim a just peace. That could happen sooner than most commentators think.

How the Israel-Hamas war will pan out is difficult to foresee since there is no clear endgame, and the downside risks of escalation are increasing as the New Year dawns. The number of drone attacks on US and international shipping through the Bab-al-Mandap strait (where the Red Sea meets the Indian Ocean) increased in the last week of 2023. A container vessel was attacked allegedly by an Iranian drone off of the coast of India, in response to which the Americans launched missiles against militant bases in Iraq – much to the consternation of the Iraqi government. As I write, India is sending naval vessels to the Red Sea. As long as Israel’s ground war continues, the risk of escalation increases as anti-Israeli opinion in the Muslim world intensifies.

That is why the Biden administration devoutly wishes for some tangible ceasefire (though it might not be labelled as such) at the earliest opportunity before the conflict gets out of hand. The Egyptian peace proposal is a starting point. But the Israeli government under Benjamin Netanyahu is adamant that the war will continue until Hamas is annihilated – an outcome that is unachievable. And how would it be verified? Hamas might pop up in Lebanon or Syria – so it would become a violent game of whack-a-mole.

If a US-Iran conflict erupts then the oil price will soar, and inflation will reignite in the EU and the UK. I’d put the probability of that happening at less than 15 percent. Netanyahu’s days are numbered (as he knows) which is why the Americans might push him off the bus sooner than expected. Either there will be some kind of deal by late February, or we enter a new phase of greater geopolitical uncertainty with a rising oil price. I err on the side of optimism.

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2023 has been the watershed year in which AI entered our lives for the first time in the form of ChatGPT and Bard. 2024 will also be seminal in the development of this technology – but in a different way. I suspect the catastrophists will be discredited as we realise that we are very far from the Terminator scenario where the networked supercomputers reach “singularity” and decide to destroy the human race. That is not so much far-fetched as non-sensical, for reasons I shall spell out early in 2024.

The real question in this space is what type of language models prove most useful. Microsoft, as I reported here recently, is working on small language models which may not necessarily write elegant prose but which might prove highly insightful in problem-solving. In 2024 educators will get access to an AI tool which will enable them to evaluate how much of a student project was downloaded from ChatGPT and how much was the result of their own thinking. Farmers will start to use AI to decide what crops to grow in which quantities based on soil analysis, the weather outlook and forecast commodity prices. I’ll have more to say about that shortly. I also foresee that the development of new AI-enhancing semiconductors will be as critical as new software. The rise and rise of Nvidia is likely to continue.

2024 will be an amazing year to be alive – but one needs to be vigilant. The downside risks are sobering, even if the upside opportunities are exciting.

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I don’t make New Year’s resolutions, but I do try to set targets for the coming year. In early October I downloaded a pedometer – a step-counter – onto my mobile phone which I have found a compulsive tool. As a way of measuring how active you have been, nothing compares.

I know a number of people who have a daily target of 10,000 steps, including one friend who started monitoring his daily step count when recovering from a heart attack. I set my daily target at 13,000 steps in October, and I have managed to exceed that at least twice a week when I go for a serious walk of around 30,000 steps – that’s three and a half to four hours of brisk walking over about 20 kilometres in distance. But my daily average step count over the last ten weeks or so has been around 9,000 – and that is not good enough.

Anyway, I’m planning a number of serious three to four day hikes in 2024 about which more later. All told, I’m aiming for an annual count of between four and five million steps. The latter would be about 13,700 steps a day which I think is achievable. I may be wrong.

It’s not just for fitness. I find that I can think as I walk in ways that I cannot indoors. Generally, I prefer walking in the countryside but a long walk across a city can be illuminating – you notice things you would never register when travelling by car. I walked everywhere in New York when I there in the autumn and marvelled at its architecture. True, urban walking is more discontinuous due to traffic and wating for the little green man.

To walk with a companion can be rewarding – people open up when they walk alongside one another. On the other hand, you walk faster alone – and there is never any argument about the route. I listened recently to an interview with Werner Herzog – a remarkable man who is a hero of mine – and he said: “The world reveals itself to those who walk”. That resonated with me.

I’ll let you know how the step count goes. In the meantime, may I sincerely wish all my readers good luck in achieving your goals in 2024 – and much satisfaction in trying, even if you fail.