Following a new PB with my 2025 predictions (an amazing 6.5 out of 10! You can find out more here), here are my serious (and not so serious) predictions for 2026:
1. Let’s start with a big one – Wes Streeting will be Prime Minister next Christmas after Sir Keir is forced to vacate the position following disastrous May local elections. I genuinely have no idea who would replace Rachel Reeves – Andy Burnham? Martin Lewis?
2. Despite wild protestations from the Edstone, the government’s ban on the sale of petrol cars will be delayed until 2040 until European car makers can compete with their Chinese rivals.
3. Asia (ex-Japan) equities will outperform the US (and, of course, Europe) fuelled by falling US interest rates.
4. The UK 30-year Gilt yield will fall to 4% as the Bank of England is forced to lower rates to stabilise the economy against a backdrop of lower tax revenues than forecast due to a technical recession. The Autumn Budget will be delayed until 25 December to bury it!
5. The US Supreme Court rules Trump’s tariffs illegal. Trump rules the Supreme Court illegal and non-patriotic. US Treasuries have a very volatile Q1. But once the US Federal Reserve starts cutting in earnest, the 10-year yield should drop more meaningfully and end the year at around 3.5%.
6. Corporate bond spreads will be wider at year-end although investors will avoid outright losses due to the current yields on offer. You’ll need to swerve the defaults though. Stay active.
7. Gold will be $3,000 at the end of the year. Could even be lower. Not sure why I think this, but I do. And I think the US dollar will make a comeback.
8. Now that the US election (and the immediate noise) is out of the way, I think the Healthcare sector could do well despite RFK Junior’s best efforts. The world is getting older and governments poorer. We need more accurate disease prevention and efficient treatment of medical problems. And governments need innovative digital solutions to keep patients out of hospital.
9. Developing economies become a major theme in 2026, either through direct access into equities and bonds or via companies in developed markets with significant exposure to consumers in these markets. Argentina and Chile now have more market-friendly administrations (whatever you make of their domestic politics) and Eastern Europe and South-East Asia already look attractive. These are an eclectic mix of markets – don’t just buy an EM index.
10. Tesla shares nosedive as its autonomous cars fail in London, crashing into random LimeBikes and e-scooters as even Elon cannot predict their movements.
As ever, don’t take these predictions as investment advice. My past performance on this front suggests I’m usually wrong (or, as fund managers like to claim, not wrong, wrong but early!)
