Russell Lynch: Spend now - but how long can Brexit ‘phoney war’ last?

BREXIT? Who cares about Brexit? The sun’s out, inflation’s low and the living is easy.

Mortgages have never been cheaper, and house prices are even going up. And with rates this low, saving’s for wimps.

That broadly summarises the present attitude of the UK punter, judging by the latest consumer confidence data from GfK.

Brits are “clearly determined to carry on shopping for today rather than saving for tomorrow”.

And with shoppers accounting for almost two-thirds of the UK’s growth, number-crunchers may well be looking at the growth forecasts which were slashed after the referendum and wondering if they were too hasty.

Among the wider public, the penny has dropped; Brexit may have been a scary bolt from the blue, but nothing’s happening yet so it’s “as you were”.

Over in the jobs market, unemployment is below 5%. Meanwhile the nice chaps at the Bank of England have lopped a few quid a month off the mortgage, so there’s another reason to hit the shops. And the £60 billion extra running off the Threadneedle Street printing presses is likely to keep those property prices high.

You can understand why some wonder what all the fuss is about, unless of course you’re one of the countless Londoners paying inflated rents and attempting in vain to get on the housing ladder.

My worry is how long this Brexit “phoney war” can last.

When we declared war on Germany in September 1939, it was another eight months before the bombs started dropping in London.

And as Deutsche Bank’s chief UK economist George Buckley pointed out today, the 2008 recession didn’t start until eight months after the onset of the credit crunch.

This is obviously not a crisis of that existential magnitude.

But the idea that we can “get away with” Brexit scot-free in economic terms is for the birds.

Sterling’s fall means inflation will be making an unwelcome dent on wallets sooner rather than later; consumers can’t keep digging into savings to prop up the economy for ever.

As for jobs, the sluggish timetable of the Office for National Statistics means we won’t actually have a picture of the UK’s labour market for the full post-referendum quarter until November, when the economic weather could be much cooler.

Encouragingly, the Recruitment & Employment Confederation’s more timely survey data shows employers have refrained from knee-jerk cuts so far, but confidence in hiring and investment decisions has plunged since May.

So don’t be lulled into a false sense of security by the mill-pond calm of the economic news; soon the “phoney war” is likely to be replaced by a real shooting match.