Gibraltar: Happy New Year? It's Hard To Tell.

In more youthful days, the New Year generally meant weeks of ruined cheques and letters as I continued, by force of habit, to write the previous year in the allotted spaces. Nowadays, life is made somewhat easier because cheques have become such a rarity and any mistakes in correspondence can be corrected by a simple click. This is just as well because the years now seem to roll by so much more quickly.

As the calendar switches over to 2017, many of us are making – then probably breaking – our New Year's resolutions. It is also traditional for columns such as this to look back at the year just gone and predict something useful for the 12 months that lie in store. Although, if the past year is anything to go by, useful predictions may be about as rare as a winter swallow.

So to my review of 2016. Imagine for a moment that a year ago you had been marooned on a desert island – or, to use the modern parlance, you had gone "off-grid". No telephone, no computer, no television, no radio, no newspapers, and certainly no Facebook or Twitter. Then fast forward to 1 January 2017 when you are rescued (or log back on to the grid). "Have I missed much?" you might well ask.

It would be difficult to know where to start. Err, that UK referendum thing in June? Well, it didn't quite go the way that nice Mr Cameron intended. He has left No 10 (and indeed the House of Commons) and the UK is set to leave the European Union just as soon as the government (and the Supreme Court) can work out how. You want to guess who is PM now? You certainly May. And the Foreign Secretary is someone called Boris.

Oh and the US presidential election did not come up trumps for Hillary Clinton (again) and The Donald, that oddly-coiffured property developer off the telly, is about to move into the White House. The Italians also had a big referendum – their PM lost to a comedian called Beppe Grillo and he resigned too – while the President of France announced that he wouldn't be running again. Meanwhile lowly Leicester City won the Premiership, Great Britain finished second in the Olympic Games, Andy Murray is the world's number one tennis player and Ireland defeated the All Blacks. Bob Dylan is the Nobel Laureate for Literature and scientists have discovered that the moon really is made of cheese.

OK that last one I may have made up, but you get the picture. No one who had been "away" for the past 12 months would believe a word of what you told them. Six decades of post-war "certainty" seem to have disappeared at a stroke and the so-called Chinese curse that you may "live in intersecting times" seems to have been fulfilled. But is "interesting" necessarily a good thing?

Sure, it is manna for the insatiable news channels and the slaves of social media but, from a financial perspective, the only certainty about uncertainly is that it is generally not a good thing – and especially not for the markets be they trading in currencies, stocks or commodities.

As we start to implement our New Year (financial) resolutions, are we likely to experience another volatile year ahead that may well affect our own personal financial planning? I should add that what follows, dear reader, are my personal thoughts and conjectures and should never be considered as advice. Let us look at a couple of areas that are likely to be of continuing interest in 2017.

Interest rates are always my first consideration because they affect everyone, be they savers or borrowers. Last year I was confident that interest rates in the UK were going to rise from their all-time low of 0.5%. After all, this record low rate had been in place since March 2009. Readers might recall that during the global financial crisis that struck the year before, the UK "base rate" had been reduced to a tenth of its previous value in just over six months. At the time I cannot imagine many people expected the lowest rate of all time to persist.

What happened in 2016? Brexit. I will not go into that subject again (at least not this month!) but as a result, the Bank of England reduced rates again – they were halved to just 0.25%. This affects us directly in Gibraltar because we are bound by the same rates, regardless of the state of our local economy. I am not going to tempt fate by predicting the next move for rates, still less the timing of such a move, but they can only move higher, right? Let's see.

A thought does strike me though. Base rates set at just above zero have been with us for nine years. Most people under the age of 30 will not have borrowed money at so called "normal" levels – or, put another way, these super low rates are fast becoming the new "normal". If rates were to increase rapidly – perhaps as a result of a currency crisis – then borrowers, be they individuals, companies or governments will need to ensure that they can afford the increased cost of servicing their debts. Nobody wants to return to those dreadful days in 2008 when asset prices were falling in many countries as banks discovered that substantial parts of their lending portfolios were suddenly "non-performing" or "toxic".

The other side of the same coin (no pun intended) is the exchange rate. In much the same way that interest rates are important for most Gibraltarians – borrowers or investors – so sterling's value against other currencies (and the euro in particular) remains a constant issue. There are two sides to this debate and what augurs well for some as the pound rises or falls produces the opposite effect for others. Anyone employed in Gibraltar who lives or spends time in Spain will generally welcome a rising pound (i.e. which buys more euro). Obviously, this becomes even more significant for substantial purchases such as property. The opposite is true for Gibraltar businesses importing goods from Europe or visitors to Gibraltar for whom a rising pound makes everything more expensive. So the falling rate in the second half of 2016 has benefitted some and disadvantaged others.

My main concern as 2017 begins is that the uncertainty we have seen around the word in the past few years shows no sign of abating. International events could have enormous consequences for financial markets worldwide. January will see a new US administration installed and later in the year important elections are scheduled in France and Germany. The political situation in Spain is still effectively in deadlock after two elections and a new, third election could eventually be needed. As I write, questions are also still being asked about a possible UK general election although this is not formally due until 2020.

I wish all readers and their families a happy and prosperous New Year. I don't have a crystal ball but I predict that 2017 is likely to be just as interesting – if not necessarily quite so surprising – as the year just gone. And I don't need a proverb, Chinese or otherwise, to back me up. Just keep watching the news.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions