Coups, uprisings and oil wars: strap in for a turbulent year

Even by recent standards it has been an unsettlingly turbulent and dangerous start to the year. But in the City and on Wall Street no one seems to have got the memo. As Donald Trump's Delta Force troops stormed the presidential palace in Caracas, plucking Nicolás Maduro and his wife from their bedroom, investors on both sides of the Atlantic were pushing their respective stock markets to dizzying new all-time highs.

- JONATHAN PRYNN

In the frigid early days of January, the FTSE 100 has smashed through the 10,000 barrier without so much as a backward glance — and continued on its merry way. Predictably, and perhaps understandably given the year they have just had, Sir Keir Starmer and Rachel Reeves were quick to grab some of the glory. The Chancellor proclaimed the landmark was a “vote of confidence in Britain’s economy and a strong start to 2026”.

Well, yes, but there’s a lot of headlines to be written between now and December 31. So let’s see where the index stands in 357 days time before we get too carried away.

There is no doubt that some of the economic auguries are indeed more promising than they have been for a few years. Interest rates are finally back down below four per cent and inflation is likely to ease back to two per cent towards the end of the year. Domestic energy bills are forecast to fall by eight per cent in April. All this is undeniably encouraging.

Set against that is steadily rising unemployment, the dangerously stretched public finances and a record tax burden. And, as the experiences of the past decade and a half have surely taught us, the one thing you can expect in an unstable world is the unexpected.

Iran and an oil price nightmare