Jeff PrestridgeJul 1 2020

Drowning our sorrows as the pubs open

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At last, we are emerging from the long lockdown that has resulted in our economy coming to a shuddering halt. 

And emergence cannot come soon enough, although I am sure some of you will argue otherwise.

This Saturday marks the gradual opening of restaurants and pubs — and personally I cannot wait for the chance to have a quiet pint in a pub somewhere in the Berkshire countryside (preferably with the gurgling Thames in view and earshot). 

It has been so long since I have had the chance to savour a pint of best bitter, drawn from a cask by a smiling (or snarling) publican.

The housing market also seems to be teetering on the verge of a significant price correction

I am literally drooling at the prospect — I might even treat myself to an accompanying packet of cheese and onion crisps. Oh, for the small pleasures in life.

I am also looking forward to a professional haircut, although I imagine it will take a while to correct the damage done by an impromptu razoring a month or so back that left me looking like a latter-day version of Friar Tuck. Lockdown spared me from widespread ridicule.

As for work, I have already been trying to get back into the swing of working from my employer’s London offices. Just one day a week to begin with.

But it has not been easy: driving in at the crack of dawn, having my temperature taken before being allowed into the main building, and wearing a mask at all times outside of my personal office.

Also, with a skeleton staff working from Daily Mail and General Trust’s offices, it has all seemed so unwelcoming. At times, Mary Celeste-like.

So, where we do go from here? Will the economy recover quickly in V-shape form or are we are heading for economic disruption, the like of which we have not seen the country’s deindustrialisation in the 1980s under the watchful eye of Margaret Thatcher?

Yes, it was heartening 10 days ago to see a 100-metre queue outside TK Maxx on London’s Kensington High Street as I spent a rare day in the office.

But as a pessimist — most journalists are born pessimistic — I fear that the months ahead are going to be grim ones.

As the government’s furlough scheme winds down, we are going to see hundreds of thousands of workers laid off.

Businesses large and small are going to fall by the wayside. Of course, the government will do everything possible to support the economy with cuts to VAT and national insurance, but I fear it will not be enough to stave off recession.

The housing market also seems to be teetering on the verge of a significant price correction.

Experts are talking about house price falls of 10 per cent and all the anecdotal evidence I see in my home town of Wokingham supports this view.

The asking prices for beautiful Victorian houses I have been keeping a watchful eye on have been coming down steadily.

With some lenders (Nationwide among them) now restricting the size of loans they are prepared to offer (relative to home values), demand is going to be choked off.

Yes, I could be wrong (I hope I am), but it is going to be pretty grim for a while. Even grimmer if the country is hit by a ferocious second wave of coronavirus (please, no).

The role of the financial services industry in the months ahead is going to be crucial.

So far, the banks have behaved better than expected, helped by a regulator that surprisingly has been on the front foot from the word go (for a change, proactive rather than reactive).

As directed by the regulator, a policy of forbearance has been adopted by the banks on everything from the payment of mortgage bills, small overdrafts, through to outstanding balances on credit cards. Yet it remains to be seen how long this will last.

At some stage, the banks are going to want their proverbial pound of flesh and they will start chasing customers for overdue payments.

I trust the regulator, with its new boss in place, will keep a watchful eye on this and intervene, if necessary. We certainly do not want a return to the grotesque banking behaviour we witnessed in the aftermath of the 2008 financial crisis.

As for financial advice, I think it is going to prove more invaluable than ever in the months ahead.

Many people are going to be looking for expert advice in ensuring their household finances are sufficiently robust enough. A green light I would suggest for financial protection specialists and wealth managers to go out and demonstrate their worth.

Rock on July 4. Mine’s a pint if you see me out and about.

Jeff Prestridge is personal finance editor of The Mail on Sunday