OK. Time, once again, for some bad predictions. (At least they make for discussion…)

  1. The euro will not totally collapse, but will have lost members by the end of the year, including Greece and Cyprus.
  2. At least two large French and one large German bank will be nationalised.
  3. Italian ten-year bond yields will average below 5% over the year.
  4. Several Eurozone states will have two or more quarters of recession. The UK will not.
  5. Inflation in the UK will fall back in the early part of the year, but be rising again by June.
  6. GDP growth will, in 2012, exceed official forecasts for the first time for years.
  7. Syria will collapse into civil war. Turkey, Lebanon, Iran, Egypt, Israel, Sunni-Shia Iraq, and Kurdish Iraq will (in some cases publicy, in others privately) take sides. Cyprus and Greece may be dragged in towards the end of the year. Any military action in Iran will occur only in this context. The balance of the conflict will remain unclear by the end of the year.
  8. Obama will win a second term easily, as the Republicans once again fail to coordinate on a credible candidate.
  9. There will not be an early General Election in Britain, but by the end of the year the Lib Dem backbenchers will be largely ignoring the Whip, and all internal coherence in the Liberal Democrat Party will have gone. Chris Huhne and Vince Cable will both have left the government.
  10. By the end of the year, a "Prince in waiting" alternative to David Cameron will have emerged and begin to be recognised by the press.
  11. There will be more riots in Britain this year. These will seem like small events compared with the civil disorder in some parts of the Continent.
  12. Britain's relationship with France and Germany will deteriorate even further over the year, and by the end of the year there will be a public conversation about when (not whether) the UK will leave the EU.