The Chancellor Philip Hammond has said we are entering ‘a new phase’ for the UK economy with a ‘different set of parameters.’ What will that mean for our personal finances?
A little less austerity than was planned, perhaps. But for savers it could mean even harder times, as interest rates look likely to fall further. Anyone going on holiday will find it more expensive, if the pound stays down among the dead men.
Pessimists predict a recession. Already surveyors report falls in house prices, and some commercial property funds have stopped investors withdrawing their money.
Optimists argue exporters win from the besieged pound, and they suggest that new trade deals will eventually boost the economy. Some like David Davis have even suggested reducing immigration could lead to higher productivity.
There is a mountain of thorny change management to climb before then. No-one knows the actual shape of Brexit, or the true cost of the administrative change to our legal system and rules governing every sector of the economy. Plus the deficit may grow bigger.
Businesses will struggle to plan and invest when the future is so cloudy. The Chancellor himself has said it could take six years to hammer out a Brexit deal. And will the average consumer want to buy a home, a car or new white goods when a recession is on the cards? Will they want to start saving for a pension?
It seems to me we must all be hard-headed and realistic about our short-term troubles, and yet try to be hopeful and positive about the longer-term. It is indeed a new phase.