Whatever some newspapers may be saying, I do fear that difficult economic times lie ahead as we wobble uncertainly all the way to 29 March 2019 – Brexit day – and then wobble all over again.
Of course, we can hope that a satisfactory Brexit deal will be struck in the months ahead, between the UK and our European Union partners.
We can also marvel at the continued resilience of the country’s labour market, the strength of the UK stock market and the robustness of the housing market.
But the economic storm clouds are out there gathering en masse. While higher interest rates may have been greeted with glee by many savers, they are bad news for the country’s indebted (and don’t we, as a nation, love our debt).
As for the future, interest rates are only going one way; up and up again, compromising the finances of many households.
Inflation remains an irritant, eating away at our deposit savings. Especially so when the likes of Nationwide Building Society (yes, that big cuddly mutual) refuses to pass on the recent 0.25 percentage point rise in the bank base rate to savers.
The pound also continues to weaken on the prospect of no deal being struck on Brexit, in turn sucking imported inflation into the economic system. It will only take the housing market or stock market to implode to ensure the storm clouds come rolling in up the English Channel.
As for the high street, it is an unmitigated disaster.
Despite the economic benefits derived from a ‘good’ World Cup and a long, hot summer, the country’s retail community is being blighted by swingeing business rates, the tax-light treatment of many big online retailers and the retreat of the banks from the high street.
How long can the government just sit on its hands while our town centres are obliterated?
Against this rather uncertain and gloomy economic backdrop, it is rather alarming (but not surprising) to read research indicating that most households are currently in no financial state to withstand a recession. They are literally living on a financial edge.
The ‘Cost of Resilience’ research, put together by insurer Zurich, paints a rather stark picture.
More winter than summer-like in tone, it states that one in three Brits (17.6m people) do not believe they have sufficient inbuilt financial resilience to withstand a shock to their household finances – be it a loss of income caused by redundancy or long-term illness, or an unexpected large bill landing on their door mat.
Almost a quarter of adults, the report concludes, have no savings whatsoever to fall back on if their household’s finances are suddenly plunged into chaos.
It also confirms that the ‘availability heuristic’ is very much at play, with most adults prioritising financial products that provide solutions to everyday problems.