A big year, but it won’t Trump 2016's shocks

 
Mark Kleinman
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Donald Trump's surprise election in 2016 will probably not be outdone next year (Source: Getty)

2016's events made fools of most pundits, and looking back at my column exactly a year ago, I fared little better.

True, I correctly said that Santander UK would re-engage in an effort to buy Royal Bank of Scotland's Williams & Glyn unit, but I was well wide of the mark arguing that the FTSE-100 would close the year at 6300.

Nevertheless, here goes with another attempt to ‎illuminate the events that will shape British business during the next 12 months.

1. Sir Philip Green

Sir Philip Green will reach a voluntary settlement with The Pensions Regulator to plug BHS's pension deficit in the spring - an agreement that will cost the tycoon £375m. But it won't prevent the watchdog gaining far greater powers from ministers, including a formal veto over mergers and takeovers for companies with more than 1000 employees.

Read more: Know your Philip Greens from your Philip Hammonds? Try City AM's 2016 quiz

2. Corporate corpses on the high street

‎The advent of significant inflation on the high street will turn more retailers into corporate corpses, the first of which wil be Agent Provocateur, the troubled lingerie brand. Matalan will also face a struggle to survive, which it will win - but only thanks to the deep pockets of its family shareholder.

3. Bosses will suffer too

The casualties won't only be corporate names - a string of bosses will be obliged to walk the plank. They will include John Fallon, the boss of Pearson, and Andy Parker, the Capita chief who has presided over a string of profit warnings. Others who will signal their intention to leave voluntarily will include Royal Mail's Moya Greene and Paul Polman, the Unilever chief executive.

Read more: Unilever fined €590m after losing Brazilian tax lawsuit

4. More shareholder dissent

Theresa May's green paper aimed at reforming executive pay and corporate governance won't prevent a fresh wave of shareholder dissent at many of the same companies which provoked anger last year, including BP and Standard Life.

Read more: Calls for better governance at Sports Direct heighten after chairman vote

5. A wave of Brexit-related departures after Article 50

Brexit-related departures from the UK will come thick and fast after ‎the Prime Minister triggers Article 50 in March, but they will not predominantly involve wholesale corporate relocations. Nevertheless, by the end of 2017, more than 20,000 City jobs will have been reassigned to overseas offices or axed altogether.

Read more: From Snapchat to Heathrow, these 13 events will change the world in 2017

6. Foreign takeovers

Other disappearing acts will include more of Britain's blue-chip companies after they are swallowed by foreign predators. Among them will be RSA Insurance, Worldpay and Shawbrook. The biggest of them, though, will be AstraZeneca, which will find itself on the receiving end of a series of bids from multinational rivals.

7. Bank stocks up... but not a rise across the board

Donald Trump's inauguration will herald a better year for bank stocks when he scraps a series of post-crisis regulatory reforms. But a more protectionist White House will spell bad news for big British exporters to the US, including the defence contractor BAE Systems.

Read more: BAE Systems to train a third of graduate recruits in cyber security

8. BT to avoid a break-up

BT will avert a full break-up after convincing Ofcom to accept revised proposals for a partial separation of ‎its broadband infrastructure unit, Openreach, allowing chairman Sir Mike Rake to bow out with his pride intact.

9. Trump to boost oil prices

President Trump's infrastructure spending boom will contribute to a mid-year uptick in oil prices, and equity markets‎ will continue to defy gravity given the inflationary gloom facing millions of consumers. The FTSE-100 will end the year at 6,890 points.

Read more: This is what will happen to oil prices in 2017

10. No more resignation memos

Theresa May will ban all outgoing UK ambassadors from writing staff memos following the departing Brexit diatribe of Sir Ivan Rogers, Britain's permanent representative in Brussels. Meanwhile, Sir Ivan will become a partner at Deloitte, where he will lead a new unit producing memos aimed at annoying the Prime Minister. *

* The last one is a joke. Probably.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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