Here's the low-down. Don't say you weren't warned!
<<Heavy sigh>> here's another one of those tedious articles rolled out at this time of year by some bore who pretends to have some kind of insight into the economic world and thinks he can read the runes accordingly…
Alas, it's true! BUT at least here you also get the football results in advance (including the World Cup), the result of the general election and other interesting stuff.
Apparently, 2010 is the year of metal tiger according to the Chinese five element astrology calendar. Ergo, being contrarianly minded, I can safely say that gold will have a bad year, unlike other metals and commodities in general.
The FTSE
The FTSE will end the year at 5,750 having gone higher in the first quarter than most people thought sensible, before getting the collywobbles in spring, having a flattish summer, then recovering in the last quarter. Strangely, the Conservatives' general election victory in May with a slim overall majority doesn't lift the markets as investors fear both the short-term pain of public spending cuts and the potential for industrial strife.
The pound in your pocket
The feared sterling crisis doesn't really materialise, but only because so many other countries' finances are as precarious as our own. There is increasing speculation that Germany will leave the Eurozone, but far too much political pressure to make it a potential reality. By the end of 2010, a quid will buy you €1.19 or $1.70.
Inflation, interest rates and other stuff
Mergers and acquisitions pick up pace, as does inflation. The Retail Prices Index (RPI) stands at 2.5% by August and interest rates have crept up to 1.5% by the end of the year, but there remain fears that a much bigger rise may be just around the corner.
Unemployment reaches 2.8 million in the summer, but is expected to fall by the end of the year as the UK has exited recession. The country achieves a better than expected GDP growth of almost 2% over the year.
Brent crude closes the year at $88 a barrel as demand continues to rise.
The banks
UK Financial Investments has sold off more than 10% of Lloyds Banking Group (LSE: LLOY) and has plans to sell off the rest by March 2011. The old nag's shares close the year at 85p. Royal Bank of Scotland (LSE: RBS) shares were fairly flat but rallied strongly in the final quarter to close out 2010 at 57p, rewarding investors with a near 100% rise on the year.
House prices
Mean average house prices fall by a little over 4% on the year, closing at an average of around £160,000 as the interest rate rise begins to hurt. Prices are expected to fall again in 2011.
Interesting stuff
Now for the interesting stuff: England reach the semi-finals of the World Cup for the first time since 1990 having gone through on penalties in the quarter finals against France as Thierry Henry misses from the spot. Unfortunately, they lose to Brazil in the semis who go on to lose to plucky surprise-package underdogs Holland in the final. Both Spain and Germany perform worse than expected. Fabio Capello agrees to stay on until Euro 2012.
Manchester United are Premier League champions again, narrowly beating Arsenal into second as Chelsea lost ground following their Champions League campaign which saw them reach the final only to lose to Barcelona.
Blackburn Rovers are surprise FA Cup winners comfortably overcoming Spurs in the final, whilst Scotland's own Andy Murray reaches the Wimbledon final only to lose to Roger Federer who announces his retirement from the sport as part of his victory speech.
Meanwhile, the summer is one of the hottest on record and the many of the main share recommendations made by Motley Fool posters multi-bag...(again)!
See you next year.
More on 2010:
