Media, markets and political outlook for 2024

Once again, we’ve had a year of significant events. The crowning of King Charles III; a Prime Minister who lasted 12 months in office; new geopolitical conflicts and the sweeping in of right-wing governments across Europe and, closer to home, the battle to buy the highly influential Telegraph newspaper. SEC Newgate’s consultants including former City and Business Editors, government Special Advisers and communications leaders take a look at what we should expect in 2024.

But before we look ahead to this year, we’ve reviewed our outlook from 12 months ago. 

Alistair Kellie said at year ago “As the cost of living crisis starts to bite over the coming months, we can expect even greater scrutiny of corporate behaviour as public patience wears thin..”

Alistair’s prescience proved right, with a scandal hitting the CBI that brought the business trade body close to collapse as members started to quit and Westminster cut ties. A turnaround is underway, but the CBI’s future is some way off being safe.

Crispin Odey was brought down by an expansive investigation in the Financial Times over his conduct as the head of Odey Asset Management. Reporters spoke to more than a dozen women who alleged Odey sexually assaulted or harassed them. The fund shut down as investors pulled their money and an FCA investigation into whether he is a “fit and proper person” to carry out financial transactions.

Elsewhere, Bernard Looney left BP after failing to disclose the extent of his intimate relationships with colleagues, and just this week Lady Michelle Mone has admitted she benefitted from PPE contracts during the pandemic – having previously threatened journalists with legal action for reporting her involvement.

Last year Paul McCaffrey said, “Social consciousness will grow ever more important in 2023 as consumers become increasingly aware of social and ecological issues. How brands act, what they say and how they source will help shape brand perceptions and ultimately, consumer spending power.”   

We believe this trend will continue into 2024, Clotilde Gros commented:

“Consumers in 2024 will continue to be squeezed and attitudes towards buying purchases will be shaped, more than ever, by ideologies. Consumers won’t shy away from their beliefs; this is particularly true as we are seeing more consumers supporting brands that align with their values. Social responsibility, for instance or sustainability initiatives will motivate spending.

“Shoppers will be spending money carefully, but on brands they believe are doing the right thing. They are fed up with greenwashing and initiatives that are perceived are fake and it will be extremely important for brands and businesses to communicate with transparency. Consumers are now more than ever aware of greenwashing and as such will be extremely quick to avoid companies that push communications campaigns around controversial topics—especially if these appear exploitative. They will have the power to tarnish reputations and brands are urged to move into 2024 with caution. Getting it right however will ensure stronger brand loyalty is what can be expected to be a turbulent trading environment.”

On this topic, Andrew Adie, added: “Our annual ESG Monitor survey brings this into sharp perspective with 77% believing it is important for corporates to act on ESG issues and 63% saying they believe greenwashing is a big problem. When asked to rate how important the ESG performance of a particular company is in determining the products and services they buy, 57% of Millennials and 55% of Baby Boomers said it was important to them.”

Economic outlook: Dafydd Rees

“2023 was supposed to be the year of recession, according to the pundits. Markets around the world are ending the year at record highs.  However, in 2024 expect weak growth and geopolitical issues such as Ukraine and Israel to have a continuing if not greater impact on the global economy. Elections in the US and UK will have major consequences, especially if Donald Trump finds a way back to the White House. 

“Over the next 12 months there’s little room for error for governments or business. But is a soft landing for the economy a case of wishful thinking? There is pressure on Central Banks from all sides, particularly from the markets, to start to cut rates. The credibility of the Bank of England is on the line amid criticisms that it failed to act quickly enough as inflation took a hold of the UK economy post-pandemic.  

“It’s true that inflation is down, but for the business world that piece of good news is tempered by the fact that the cost of corporate debt has soared. Yet it’s too easy to be a pessimist. Employment levels remain high here in the UK and elsewhere. House prices have continued to be resilient. Real income growth has turned positive.

“But higher interest rates take time to feed through into the real world. According to the Bank of England, 45% of the fixed rate mortgage deals agreed before rates started to rise back in 2021 have yet to be renewed. Has the impact of raising rates yet to bite the UK consumer? We’re about to find out.”

Market outlook: Elisabeth Cowell

“It’s not going to take much to surpass the poor 2023 M&A volumes, and there is plenty of pent-up demand that will mean that the market has to let off some steam in the next 12 months.

“But with the BoE, ECB and Fed having put interest rates on hold, the first half of the year could see companies holding out for sights that rates might fall. In the meantime, the cost of capital will remain high, while debt markets are expected to remain volatile. But we expect fundraising to become easier in H1 2024 before the markets open more generally for M&A and IPO activity after that.

“Sectors to watch are TMT, Consumer Industries and Energy which have topped the charts when it comes to M&A activity in 2023 as businesses look to streamline their costs and consolidate. This is expected to continue into 2024.  But the really interesting M&A tailwinds are being observed in the Financial Services sectors, which are expected to be largely driven by challengers, payments and insurers.

“Private equity is still expected to face similar headwinds as it did this year in 2024, but any easing off will mean that there is much more activity given that we have seen some of the biggest PE brands still raising significant capital across a range of asset classes.

“The IPO market remains relatively stagnant and conversations within our network suggest that there are relatively few serious conversations relating to listings in the near term. Although, it is worth watching the IPO of Chinese retailer Shein, which could give investors’ confidence because the success of just one or two IPOs is likely to bring a swell to the market.”

Media outlook: Simon Neville

“Next year will be the first time in 14 years that the UK’s media has covered a general election where the opposition have a real chance of success.  Expect to see editors shifting their tone because they will want to build strong working relationships with the Labour party to retain the same levels of access to the power they enjoy under the Conservatives.

“This will be particularly true for The Sun newspaper, where media tycoon Rupert Murdoch famously said he only wants to back winners. It means a switch to Labour would make commercial sense – as it did in 1997 when the paper supported Tony Blair – although it could prove tricky convincing the Labour Party of its genuine support when some of the paper’s senior journalists have such close ties to the Tories. Deputy editor James Slack worked in Downing Street under Boris Johnson and political editor Harry Cole collaborated closely with Liz Truss over a biography of her life and career.

“Overall, newspapers have far less influence with the public, but in Westminster the perception of power the media holds remains strong and is set to continue.

"Elsewhere in the media industry next year, we can expect to see the sale of the Telegraph titles completed. The current front-runners are a UAE-backed fund, the Daily Mail General Trust and GB News co-owner Paul Marshall, meaning the debate around newspaper ownership, plurality and editorial influence will increase regardless of who buys it.

“For businesses and organisations looking to land coverage in the media, expect to see journalists under ever-more mounting pressure, with fewer resources and wider briefs to cover. It will be imperative for anyone seeking coverage to serve up news stories to journalists quickly and easily, to take as much weight off their shoulders as possible.

“In terms of stories, expect the same topics of 2023 remain; with the economy, inflation, interest rates and cost-of-living likely to be front and centre yet again.”

Politics: Fraser Raleigh

“2024 will be dominated by the general election. Next autumn still feels the most likely date, but a snap spring election is possible. January 2025 is the latest possible option.

 “Rishi Sunak ends the year as unpopular as Boris Johnson was when he was ousted and with the polls stubbornly unchanged. Labour haven’t done much to keep their lead other than not be the Conservatives, but that looks like it might be enough for the voters.

“But nothing is inevitable in politics. Steer the tricky Rwanda Bill through Parliament and show that he may just be able to “Stop the Boats”. Follow up the cut in National Insurance with more radical tax cuts in the Budget and maybe – just maybe – if interest rates follow inflation’s slow down and the media really turn on Starmer then there’s a path to victory. 

“A divided Conservative party and a (mostly) disciplined Labour party suggest that’s a narrow path, though, with business increasingly seeing 2024 as a year to get ready for change (see our SEC Newgate guide - Ready for Government? Preparing for Labour ).

 “But who knows when it comes to Westminster. After all, who would have predicted that this year would end with David Cameron going into the Foreign Office and Nigel Farage coming out of the jungle…”

The Great Disconnect: Leyla Hart-Svensson said:

All of this adds up to what can only be described as a ‘Great Disconnect’, evident across business, technology, and the community.

Public pessimism prevailed: “Our 2023 ESG Monitor revealed that the UK is now the most pessimistic nation within the global study of 12 nations. And in the context of a cost-of-living crisis, intergenerational housing inequality, a declining NHS and dwindling confidence in the political system, it is perhaps unsurprising that three quarters (76%) felt that the country is heading in the wrong direction."

Increasing demand for accountability from business and leaders: “This pessimism set the scene for stronger interest in companies’ ESG actions and demands from the public that they should use their power and influence for good. However, the disconnect between business and the community was evident, with only a third (31%) agreeing that ‘companies are using their power and influence to create positive change’."

AI alarm: “SEC Newgate’s research into public sentiment on AI revealed an emerging disconnect with this paradigm-shifting technology, with only 28% of the UK public feeling positive about the ‘evolution of AI technology in society’, with most concerned around potential negative impacts on jobs and data privacy."

A broken planning system exacerbating the national housing crisis: “A range of systemic issues (revealed by SEC Newgate’s 2023 National Planning Barometer) combined with the pressure of frequent changes to national planning policy, are preventing communication and engagement between planning officers, planning committees, developers, and the community. Hanging over all of this is a crisis of resource that sees local authority planning departments unable to deliver the service on which the planning system relies. The result of the disconnect: planning consents are heading towards a record low - and a mammoth task waiting on the desk of the next government in delivering the affordable and social housing that is needed across the UK."

Bridging the Great Disconnect in 2024

Leyla Hart-Svensson concludes: “To address the ‘Great Disconnect’ evident in multiple sectors and the overarching mood of the nation, 2024 will need to be a year of significant change for the UK. And it will be leaders within business and government who are expected to be the vanguards of that change, with their actions and how they communicate commitment under the microscope."