(Bloomberg) -- It’s been a busy 2024: Donald Trump got elected again, interest rates eased and geopolitical tensions intensified. As the new year approaches, Bloomberg News spoke to a dozen British chief executive officers about what to look out for in 2025. With insights from bosses from a range of sectors including finance, construction and energy, here are the key themes for UK Plc.
Even More AI
“What’s a conversation about 2025 if we don’t talk about AI?” asked TS Anil, chief executive officer of digital bank Monzo Bank Ltd. Anil expects a “real acceleration” in artificial intelligence developments next year.
He’s not the only one. AI will be the “dominant theme” for most industries, according to Kenton Jarvis, chief financial officer of EasyJet Plc, who’s taking over as CEO in January.
Jill Popelka, who runs cybersecurity firm Darktrace Plc, said AI will become an “indispensable, yet increasingly invisible force” in the workplace as it seamlessly integrates into daily tools. That transformation will require basic AI literacy because “the real challenge lies in trust,” she added.
Dirk Hahn, CEO of Hays Plc, said the recruiter is “yet to see significant demand for AI-specific jobs” due to costs and legacy infrastructure, but expects new roles to appear in higher numbers.
Alex Kendall, who leads automated-driving startup Wayve Technologies Ltd., said 2025 will be the year that robotics truly arrives in the physical world. He expects prototypes to be launched as viable products by the end of next year, but said regulation must keep pace. “The UK legalized auto driving. Now, we need this legislation to be implemented by the regulators, so we are looking out for that,” Kendall said.
Labour Policies
Some British bosses hope 2025 will be the year of long-awaited reforms from the Labour government.
A shakeup of planning rules to boost housing supply, support for first-time buyers to lift demand and a stable economy are top of the wish list for housebuilder Barratt Redrow Plc. “The next six months are vital for the government to demonstrate that it can deliver the growth it has committed to and boost consumer confidence,” said CEO David Thomas.
SSE Plc CEO Alistair Phillips-Davies praised the government for rapidly developing a plan for clean power by 2030 and sees 2025 as a critical year to keep this target on track. However, he called for clarity around a proposal to localize UK electricity prices and wants the government to begin talks with the EU about linking emissions trading schemes. Uncertainty around these two topics is concerning investors, Phillips-Davies said.
Others say Labour could do more. “We’d still like to see the government introduce more policy around pension fund investment in the markets and have more incentives for UK entrepreneurs,” said Tim Cockroft, executive chairman of investment bank Singer Capital Markets.
Consumer Confidence
Many British bosses have criticized Chancellor of the Exchequer Rachel Reeves’ budget, arguing it will drive up the cost of doing business and weigh on consumer confidence. That remains a key worry for UK Plc.
“I am concerned that as you see wage growth slowing and also costs going up in business, that you will have consumer confidence coming off slightly,” said Helen Gordon, CEO of residential landlord Grainger Plc.
While pressures on consumer spending will likely continue to affect retail and hospitality, EasyJet’s Jarvis sees reason for optimism as vacations remain “the highest priority item within household budgets.”
Health of the LSE
The UK stock market has had a tough 2024, slipping in the league tables as listings dried up and swathes of companies were bought.
In theory, that means it can’t get any worse, according to Singer’s Cockroft. Private equity-backed companies might be looking to list next year, he said. Cockroft also expects dealmaking to pick up, with UK companies going on the hunt as well as continuing to be takeover targets.
Tech Breakthroughs
It’s not all about AI. 2025 could also be the year of important scientific discoveries that reshape business.
Andy Palmer, the former CEO of Aston Martin Lagonda Global Holdings Plc and current chairman at electric-vehicle charging company Pod Point Group Holdings Plc, is expecting breakthroughs in space mining and fusion energy. The first could “disrupt terrestrial resource markets,” he said, while the second could “upend global energy markets.”
Closer to earth, Palmer anticipates “intensified adoption” of EVs next year, driven by government subsidies and falling battery costs. In 2024, consumers shunned greener vehicles, which tend to cost more than their combustion-engine equivalents.
Trump’s Return
Another Donald Trump presidency is generally viewed favorably by some British CEOs — though with a tinge of caution.
John Neal, who heads insurance market Lloyd’s of London, said UK companies will keep an eye on Trump’s protectionist stance. “Short term, it would be a very careful eye, but not a worried eye on the US,” he added.
Grainger’s Gordon is concerned that companies could walk back their environmental policies when the climate skeptic takes office. “When you’ve got Trump in the US, you worry people won’t give that as much attention,” she said.
Geopolitical tensions could also increase in 2025, forcing businesses to diversify their supply chains, Palmer predicted. “Nearshoring and ‘friend-shoring’ will become common, especially for critical components like semiconductors and EV batteries,” he said.
--With assistance from Kate Duffy, Eamon Akil Farhat, Tom Rees and Ben Scent.
©2024 Bloomberg L.P.