Here we are again in a New Year, and as I finish off my piece for this issue the 45th President of the United States is being sworn in, and a couple of days ago the Prime Minister told us that “Brexit was Brexit”, and it was likely to be hard! It remains to be seen exactly what flavour Brexit we will get, and in any event, it will take considerably longer than 2 years before we fully understand how the economy will fare outside the EU. Some things will undoubtedly change, but the UK has a long history of making the best of any situation, and in the long-term I’m sure we will be fine. There will be challenges, some domestic and, probably, more international. A number of European elections loom this year; and the rise of populism, which contributed to the EU referendum outcome and swept Donald Trump to US election victory, could pose a threat to the eurozone in the years to come.

I wait, with some trepidation, to see what the first months of Trump’s tenure will look like, but it would be a mistake to believe everything ‘The Donald’ says can ultimately be delivered. I suspect he will be unable to do many of the things he has said he intends to. However, he has already set in place measures to unravel the Affordable Care Act (Obamacare) and some of the environmental measures of which his predecessor was, rightly, proud. What he can do, of course, he will. The US will become more protectionist, although it is difficult to guess the speed or extent of this. But the budgetary conditions within which Trump will be operating are extremely difficult. In the UK the Chancellor described our public debt burden as “eye-watering”, and the situation in the US is very similar. There will be tax cuts and more public spending but the room for manoeuvre is as limited there as it is here.

It may well be a mistake to believe everything Trump says will happen, but the markets appears to have reached a different conclusion. What we have seen since Trump’s election seems to exaggerate what he can actually deliver. The new administration is likely to achieve slightly higher US growth than we would otherwise have seen and a stronger dollar, but not to the extent the markets’ reaction would suggest.

Looking globally, some of Trump’s policies may raise problems for emerging markets. A strong dollar has traditionally been bad news for the developing world and emerging economies also tend to be more trade reliant, so Trump’s more protectionist stance could be unfavourable for them. One potential beneficiary is, bizarrely, Russia. Who would have thought that there might potentially be a cosy relationship between their leaders? Still, I guess it might keep their fingers off ‘The Button’!

Before I slip off to hibernate for February, a couple of observations. We have just started to see indications of increases in Bond yields and, potentially, fixed-rate mortgages. This may be the year to lock-in value for the future. If you have mortgage commitments, or preserved pension benefits, the current financial climate may offer you fantastic opportunities to help secure the future and take advantage of what may be rare, or possibly once in a lifetime opportunities. Don’t sit on your hands, get advice.

Right, I’m off to find a couple of extra blankets, and a hot toddy. See you in the Spring.

David Foot