THE BLOG
18/12/2013 05:26 GMT | Updated 16/02/2014 05:59 GMT

Crowds, Banks and Bitcoins Will All Make Headlines in 2014

Crystal ball gazing is a hazardous activity, but one thing is certain without mystical help: 2014 is going to be a turbulent year for the economy.

Both for professional and personal finances the New Year promises to be one of opportunity and peril, of innovation and uncertainty.

Old Hotston Moore's Almanac predicts a rise in interest rates, which will please savers; although it may take some shine off the stock market and alarm a mortgage sector already looking complacent again about the multiples of income it is prepared to lend.

The prospect of rates going up is hardly good news for retailers either, and we can expect more casualties through outright collapse or forced acquisition.

Against this backdrop, one of money actually starting to cost significant money for the first time in five years, will remain the shortage of finance from banks for entrepreneurs.

But lending nature abhors a vacuum, so expect to see crowd funding develop further, especially for smaller businesses making or trading in something that investors find appealing.

Next year might see the bitcoin, that strange computer-generated currency free of central bank control, continue its remarkable rise. Or it may collapse completely. Although now that a London street vendor is accepting them as payment for burgers, perhaps the bitcoin has finally arrived.

There will be shortages of another kind, too - talent. This will impact on engineering, science and languages.

We will continue to see growth and activity in the media, technology and financial services sectors, with all likely to show entrepreneurial flare at its best.

But there are huge structural issues with UK Plc as a whole which make the strength of the recovery still questionable.

The lack of funding for small and medium sized enterprises, which must be growing sick and tired of being told how important they are whilst facing indifference from bank lenders, is a real worry. They are not just the backbone of the country, but of entire communities.

This is particularly significant in a globalised economy that will see more UK companies end up foreign owned, their profits taken out of our economy.

Tax avoidance will remain on the agenda, with professional advisers and Her Majesty's Revenue & Customs, playing economic cat-and-mouse to test resolve and ideas, sometimes in court.

At the other end of the spectrum, cuts to benefits will widen the gap between the 'haves' and 'have nots'. Young people are still going to face a hard time getting onto both the work and housing ladders, squeezed between rising property prices and sluggish job prospects.

As auto-enrolment rolls out we will see if employees can afford to contribute to a pension, something which may also temporarily dampen consumer spending as people find they have less spare cash.

But the screamingly obvious need is to make sure money is available to smaller businesses. The Government could also help by removing the red tape which makes it so hard for global businesses to open a bank account in the UK.

A truly radical thought would see ministers investing in significant industrial infrastructure outside of the South-East before the whole economy keels over from being so southern heavy. We still need to make things after all and ease pressure on the creaking infrastructure of transport, health care and schools.

I would like to see the Government giving tax breaks to firms that invest in education and training, perhaps focusing in support for courses in areas where the country has a skills shortage.

The New Year will also see important votes in Europe to improve opportunities for women to reach the boardroom of companies. Temporary quotas would certainly help.

But whatever the year brings, we can at least expect it to be interesting, perhaps even in some good ways, however rough the ride turns out.