How have my January forecasts stood up against six months of geopolitical shocks, economic uncertainty and changing markets?

Back in January, I published my outlook for 2026 under the title “Where Execution Separates Winners from Wishful Thinkers.” Rather than producing another set of predictions, I wanted to identify the forces that I believed would matter most during the year.

Six months later, after conflict involving Iran, renewed volatility in energy markets and another wave of geopolitical uncertainty, it feels like the right moment to revisit those predictions. Not every forecast has been perfect. But the underlying framework has been tested by events that few expected at the start of the year, and so far it has held up.

If your investment thesis can’t survive an unexpected geopolitical shock, it probably wasn’t much of a thesis to begin with.

 

1. The UK economy would prove more resilient than expected

Perhaps the biggest prediction was also the simplest: Britain wasn’t heading into either boom or bust. Instead, the economy would grind forward. The numbers support that view so far.

UK GDP grew 0.6% quarter-on-quarter in Q1, the strongest pace since Q1 2025 and ahead of expectations. The Bank of England kept the Bank Rate at 3.75% through June, with two MPC members voting for a rise rather than a cut. CPI stood at 2.8% in May. Services inflation—the stickier measure I highlighted in January—has eased to 3.7%, lower than I expected but still high enough to justify the Bank’s cautious stance.

Then came the year’s biggest external shock. The conflict involving Iran threatened higher oil prices, renewed inflationary pressure and another blow to business confidence. The April ceasefire brought relief, but it has proven fragile: fighting resumed in July, and energy markets are once again pricing in disruption rather than resolution.

Q1 didn’t capture any of that. Q2 almost certainly will.

Two scenarios are worth sketching. In the mild case, the flare-up stays contained and de-escalates within weeks, growth slows, but full-year GDP still lands close to 1.0%, broadly in line with where forecasters have revised down from my January estimate of 1.2%. In the disruptive case, renewed Strait of Hormuz disruption pushes oil meaningfully higher for a sustained period, services inflation stops easing, the Bank’s stance shifts from “hold” to “hike watch”, and full-year growth risks falling closer to 0.5%.

Which plays out depends less on UK fundamentals than on decisions made well outside Britain’s control.

Resilience has been real. Whether it’s durable through a full quarter of geopolitical disruption is still being tested.

 

2. Execution would matter more than the economic backdrop

The title of my January outlook wasn’t accidental, and if anything, the principle has sharpened.

The test I set myself in January was simple: would companies that invested in productivity, pricing discipline and capital allocation outperform peers waiting for the macro picture to improve?

Across automotive, technology and private markets, the answer has been yes. The businesses I’ve watched close deals, protect margins and win market share this year are, almost without exception, the ones that kept investing through uncertainty rather than pausing for clarity that never arrived.

The counter-test matters too. If a company’s second-half performance turns out to hinge more on oil prices or interest-rate decisions than on anything management did, that would undercut the thesis. So far I haven’t seen that pattern.

The next quarter, with energy markets back in focus, will provide the clearest test yet.

 

3. Automotive would become a capability race, not simply a volume race

The claim in January was that capability would matter more than scale: software, data, pricing sophistication and the ability to understand where demand actually sits.

That has continued to play out, most visibly in a debate I’ve pushed throughout this year. Europe has been looking for EV demand in the wrong place. The public conversation has focused overwhelmingly on private consumers, but the more durable structural opportunity sits in corporate fleets, where the economics increasingly favour electrification regardless of consumer sentiment.

That isn’t a new position. It’s simply the volume-versus-capability framework applied to a specific segment.

The operators who understand fleet economics are positioned to win market share even in a softer consumer EV market. Those still relying on volume assumptions are not.

 

4. AI would move from promises to proof

One section of my January outlook argued that 2026 would be the year organisations had to demonstrate measurable returns from AI investment.

That is exactly where we’ve arrived.

The conversation has shifted from pilots to productivity, from experimentation to commercial outcomes. In boardroom discussions this year, the question has changed from “What can this do for us?” to “What has it actually returned?”

The businesses that can answer with a number, rather than an anecdote, are securing the next round of investment. Pilots without a clear measurement framework are quietly being defunded.

 

5. Capital allocation would still matter more than optimism

The consistent theme across my writing this year has been capital discipline: the era of easy money wasn’t returning, whether in venture capital, private equity or listed markets.

That has played out, but unevenly.

Quality businesses—with defensible margins, clear unit economics and management teams that can demonstrate disciplined execution—continue to attract capital on sensible terms.

Businesses asking investors to fund a growth story rather than a proven track record are increasingly struggling to close rounds at all, let alone at the valuations they expected eighteen months ago.

The cost of capital may have eased.

The discipline required to allocate it well has not.

 

The biggest lesson

The prediction I’m most pleased with isn’t a specific GDP forecast or an interest-rate call.

It’s the framework itself.

I believed 2026 would reward businesses that focused on execution rather than waiting for perfect conditions.

Six months later, despite conflict in the Middle East, volatile energy markets, softer growth expectations and continued geopolitical uncertainty, that remains the defining characteristic of the year.

The macro environment matters.

The Q2 numbers, when they arrive, will matter too.

But execution matters more.

Good forecasting isn’t about predicting every event.

It’s about identifying the forces that still matter after the unexpected happens.

Six months into 2026, those forces remain remarkably consistent.

 

What do you think?

Which of these themes do you think will prove most important during the second half of 2026?

I’d genuinely be interested to hear where you agree—and where you think I’ve got it wrong.

If you enjoy this type of analysis, consider subscribing to my Substack account (@Mike allen462220). I publish evidence-based perspectives on macroeconomics, automotive, mobility, AI, and capital allocation every week, focusing less on headlines and more on the long-term trends shaping businesses, investors, and markets.