Stand by for stormy waters as Brexit reality finally bites

Mr A buys a lovely German car in 2015 when the pound was at its strongest against the Euro at 1.45 and it cost £22,241.

In 2017 he buys that same car and the exchange rate has crashed to 1.12 but this applies only to what the dealer paid to import it. His profit or mark-up is unaffected and he charges the same amount; let’s say £5,000. Cost is now £27,321

So we crash out of Europe and there is a 15 per cent tariff applied to its cost to the dealer. The cost is still at 1.12 euro to the pound but is now £30,670 a 38 per cent increase.

If the pound slides to parity in January, and many say it will, then the car costs £33,250, an increase of 49.5 per cent.

If the pound slid that far then interest rates would have to increase to draw funds into the country to stabilise the exchange rate.

You might find your payment plan (and your mortgage) has increased drastically on top of the revised exchange rate and tariff costs. By how much depends on the people issuing the plan. We have been misinformed by the government that the latest small interest rate was to prevent growth surging away. In fact growth is flat. They just do not want people blaming Brexit for what is happening.

So it’s hard times ahead. If you still have a job! Those working in the car plant at Ellesmere Port and at Nissan in Sunderland probably will not as there is a 90 per cent chance of closure. So higher prices and less choice for the rest of us.

Robin Lloyd, Ellesmere