SEC Newgate’s 2025 Outlook – Navigating a year of change and challenge

2024: A year in review - Alistair Kellie

This has been another year of considerable change. The first Labour government in 14 years; the accelerated use and adoption of technology in the workplace; likely new owners at some of our oldest media groups, and business facing the dual challenge of new tax burdens and uncertainty over the scale of future US trade tariffs. 

However, some things haven’t changed. Our favourite institutions have weathered reputational threats, well-known individuals have continued to behave badly, but more positively, the UK remains a leader and innovator across many emerging technologies and industries, whilst London has retained its place as the best ‘global city’ in the world. 

Before our experts make their predictions for 2025, we’ll take a look at who came closest 12 months ago…

Back in December 2023, former government adviser Fraser Raleigh was right to suggest that, “Labour hadn’t done much to keep their lead other than not be the Conservatives, but that looks like it might be enough for the voters.” Turning to the economy and the impact of geopolitics, Dafydd Rees said: “…Elections in the US and UK will have major consequences, especially if Donald Trump finds a way back to the White House.” 

Thinking of markets, Elisabeth Cowell said: “Private equity will face significant headwinds, but any easing off will mean there is much more activity.” Meanwhile, consumer industries specialist Clotilde Gros predicted that ideologies will shape consumer spending with, “social responsibility, for instance, or sustainability initiatives [motivating] spending.”

Finally, last year the SEC Newgate ESG Monitor revealed deep pessimism in the UK, with our head of research Leyla Hart-Svensson remarking that “…three quarters (76%) felt the country is heading in the wrong direction." Let’s hope that we’ve now turned that corner and can move towards a period of positivity and growth. Whilst making predictions is a mug’s game, once again, we’re looking ahead to what our experts think we should expect in 2025…

Politics and regulatory change

"The next year will determine whether Labour can unlock economic growth or whether it becomes boxed in for the rest of the Parliament by its first Budget.” says Fraser Raleigh.

It will bet big that reforms to planning, devolution and investment will unleash development and that it can show improvements in public services but will face rising nervousness from Labour MPs that change won’t come fast enough. 

Its tough first Budget, bringing tax rises which businesses insist will hit recruitment – combined with an extremely tough departmental spending review coming next summer – will squeeze the government’s room for manoeuvre if that bet doesn’t pay off.

It won’t just be lower case ‘reform’ that makes Labour MPs jittery. 89 of the 98 seats where Reform UK came second at the general election are held by Labour, with the party neck-and-neck with them in Wales ahead of the 2026 Senedd election. Reform is professionalising and – crucially – fundraising in a serious way. 

All parties are acutely aware of this growing threat, but Labour knows that – having won on a promise to restore normality and prove the system can work – it has no time to waste after a shaky first six months in office.

Gareth Jones predicts a year of upheaval for the Conservatives: “Unease will grow in 2025, and we are likely to see the Conservative party reach for the solution they think will work - the man who delivered Brexit. Past misdemeanours will be forgotten and there will be plenty of talk about his unique appeal to voters across the country.” 

Although obstacles remain - such as Johnson not being an MP and Kemi Badenoch already in the top spot - Boris Johnson’s powerful break-in-case-of-emergency allure will still appeal to many in the party, especially as Nigel Farage and Reform continue to gain traction.

That progress has in part been facilitated by increasing politicisation of the media. Commenting on those trends, Simon Neville says: “Last year saw thousands of media jobs gone, newspapers shuttered and journalists cowed. Donald Trump’s victory has empowered Elon Musk’s war on the media. Closer to home, it was noticeable how the newspapers played virtually no part in influencing voters at the general election.”

In 2025, communications professionals will need to carefully consider the routes to reaching audiences. “But news remains in high demand,” added Simon, “and those journalists that remain will be under enormous pressure. Companies must appreciate this and be supportive if they want to be treated favourably.”

Macro-economics and markets

Looking at the financial markets, Bob Huxford sees optimism in store for 2025: “A significant uplift to the valuations of UK equities in 2025. The average forward price earnings ratio of UK listed companies relative to the rest of the world is currently lower than it was at the time of the financial crisis. The divergence between the UK and US has been particularly acute, with the US at historic highs; at some point, the world will recognise this anomaly, and funds will begin rotating back into UK companies.” 

This should be aided by a strengthening UK economy, falling interest rates, returning consumer confidence, and a relatively stable political backdrop. Bob adds: “Capital market reforms should also make it cheaper to raise money, easier to list and, in a world first, enable the trading of shares in private companies via the PISCES initiative.”  

Equities are not the only area seeing potential for growth in the new year: “Donald Trump’s crypto-friendly stance and leadership changes at the U.S. Securities and Exchange Commission are accelerating the integration of digital assets into the global economy,” said Ian Silvera. “With Bitcoin and Ethereum ETFs gaining traction, 2025 could further mainstream crypto investments.” However, the UK risks missing out on opportunities if regulators, the Bank of England, and the government don’t support the industry, potentially costing the London Stock Exchange and Aquis key crypto IPOs.

Taking a broader look at the global economy, James Carnegie turns to the US: “Will Trump’s tariffs trigger inflation in 2025? Economists are concerned that aggressive tariffs could raise import prices, delay rate cuts, and spark retaliatory moves from the EU. None of this would be good for global economic growth. The outcome may hinge on how Trump perceives their impact on the US stock market.”

Sustainable investments in 2025

The UK’s strides towards its climate goals in 2024, including the closure of its last coal-fired power plant and record-breaking renewable energy production - set an optimistic stage for 2025. Declining interest rates are expected to boost demand for ESG and green investments. However, SEC Newgate’s financial comms team warns of hurdles ahead, with many sustainable investment trusts still grappling with significant discounts.

“The Labour government’s manifesto promises around renewable technologies and investments are beginning to take shape,” they note, suggesting cautious optimism for sustainable investment growth.

Technological acceleration

Artificial intelligence has transitioned from novelty to necessity. “AI is now a mainstream technology,” says Tom Nutt. “Everyone uses Google Gemini, and Co-Pilot will become the norm for knowledge workers. 2025 will be the first year when we see what the next ten years look like.” The challenge lies in ensuring organisations and workers leverage AI effectively, with talent optimisation becoming a key focus.

Yet the beneficial power of technology to drive corporate insight and efficiency is offset by its ability to facilitate the rapid formation of activist groups set on shaping the strategic agenda of corporates to meet their world view and goals.

Alistair Kellie observes: “Activist movements and campaigns can be created more easily than ever. The rapid evolution and adoption of generative AI will only accelerate this further and, in so doing, add another level of complexity to a company’s risk register. In 2025, we’re going to see companies fending off ever-more elaborate activist campaigns, some of which might be nothing more than an illusion. Planning, preparation and sophisticated digital monitoring are essential to protect corporate brands.”

Social and environmental impact

Andrew Adie agrees that 2025 will be a year of activism: “We’re already seeing a major fight emerging between countryside and city around farming protests and grey- and green-belt development. As wildlife and nature charities also get involved, the battle between infrastructure and housing versus preserving nature and wild spaces will rage through the next year.” 

COP30 will spotlight tensions between developed and developing nations, particularly regarding reparations and fossil fuel transitions. “It will be a highly charged and emotive COP with a renewed fight between those countries (led by the Trump administration) who believe in a slower transition and a future for fossil fuels, vs those that believe we need an immediate ban and far greater decarbonisation,” adds Andrew. “I expect the voices of youth and indigenous activists will be very prominent, having been largely shut-out and banned from the past three COPs”

For Alice Cho, companies in 2024 have faced a growing pressure to tackle social, political, and environmental issues, especially from younger stakeholders. “In 2025, the message is clear: we need to go beyond words, embedding ethical priorities into our work, fostering trust through integrity, and ensuring our actions reflect genuine, impactful values.”

Climate and energy transition

The UK government will prioritise climate as a global leadership opportunity, predicts Tim Le Couilliard. “The focus on energy transition could distract from all the other challenges the government is facing, while resonating with voters. Raising the GHG target to 81% was a bold strategic move as Labour keeps sights set on the next election, but I think it will be a move they come to regret.” 

“The potential easing of electric car sales targets might suggest a softer stance on environmental regulation, but with the built environment responsible for 40% of UK emissions, clarity on Minimum Energy Efficiency Standards (MEES) is essential as we approach 2025. Regardless of any political shifts, I believe a sustainability-first approach will remain a priority for investors, developers, and occupiers,” says Laurence Hill.

Meanwhile, Cat Ommanney notes the slow uptake of FCA’s Sustainability Disclosure Requirements: “Will this legislation deliver clarity for investors and avoid greenwashing? I’m doubtful. While the investment industry is heading towards a greener future, I’m not convinced the SDR rules will be the silver bullet the regulator was hoping for in 2025.”

Consumer behaviour

Ensuring consumers have the confidence to spend and drive the economy forward has been a key topic of debate in the past year and will be a key imperative for the new year.

Clotilde Gros predicts, “Household spending will remain muted in 2025, as the global geopolitical and macroeconomic environment continues to impact sentiment. Consumers will search for value and addressing affordability will be crucial for businesses to impact purchasing decisions.” 

Looking to the crucial housing market, rising interest rates, inflation, and economic uncertainty in the wake of the new government have driven consumer behaviour in residential property this year, says Megan Rees. But despite a lack of clear incentives from the government to entice buyers, industry experts predict that 2025 will be one of the busiest we’ve seen in years. “The UK’s appeal continues to resonate,” says Megan. “We’ve had a turbulent year, but current activity points to a positive 2025.”

For Roy Turner, 2025 is a year of transformation, where challenges and opportunities collide in equal measure, particularly in a world in which consumers buy products and services that align with their values, as well as their needs. “Take Tesla, for example: Elon Musk was great at building the company and its brand but his decision to align himself with Trump risks alienating Tesla’s traditional customer base, and he now faces significant market headwinds. Can Musk navigate these challenges? 2025 may be a defining year for the company.”

Bridging the gap between corporate and consumer values will remain central to corporate strategy and communications in 2025. Leyla Hart-Svensson says: “Expectations around what makes a ‘good business’ have changed forever, and our 2024 Responsible Business research found that six in 10 (57%) of the UK public expects companies of all sizes to play a more active role in society, with three quarters (75%) saying it’s important that large companies conduct their business in responsible ways.”

Still, 42% of the UK public believe that companies of any size behave responsibly, with a significant performance gap between importance placed on this behaviour vs perceived performance. The need for business to show leadership on delivering social and environmental impact into 2025 will continue to be a core focus for the public.

Finally, for Joanna Kent, the healthy eating trend will continue to influence the food and drink industry, with growing demand for products featuring natural, recognisable ingredients and clear labels. Jo notes, “As awareness of nutrition's role in health grows, consumers will increasingly seek food and drink that supports overall wellbeing for the mind, body, and soul.” Here again the role of activism and the dissemination of information, and misinformation, remains critical.

Summary from Emma Kane

Change has been the theme for 2024, as the world entered and emerged from the Year of Democracy which has seen new governments and new political directions emerge in more than 70 countries as half the world’s population went to the polls. 

It has also been a year of risk with geopolitical tension, economic uncertainty, wars and ongoing climate change, creating tragedy and challenges for people, governments and business. 

Innovation has been another key theme as dystopian fears about AI were replaced by excitement and a desire to embrace the technological revolution that it is bringing. 

For me, the key take away is that everything we have seen in 2024 - including the election of Donald Trump as the next US President and the huge change that could herald in global economic, environmental and military leadership - lays the foundations for further change in 2025. 

All these issues impact business. The power of business to be an agent for positive change means that it faces greater risk - it is seen as both a solution for some of the world’s challenges and the cause of some of the planet’s most intractable problems. 

Understanding that risk, understanding the stakeholders that are setting the agenda, and ensuring that the voice, intentions and strategy of business are understood and heard will be critical for organisations as they navigate yet more choppy waters in the new year. 

Yet, business can do that and has a critical and positive role to play. So, my message for 2025 is that this is no time for corporate wallflowers.  Business needs to understand the risks in the context of their whole corporate ecosystem and deliver bold solutions that are communicated with impact, because the alternative is unlikely to succeed against this backdrop.

And finally, I would like to take this opportunity to thank my wonderful team and our fabulous clients and partners for another great and fulfilling year together.  Enjoy this precious time of year with your family and friends – have a wonderful holiday and most of all I wish you success, peace, health and happiness in 2025.