French Referendum: Winners and losers: The after-effects

Will mortgage rates fall after the vote? They are about to come down anyway, and the vote has made no difference. Now the pound is outside the exchange rate mechanism, the Government has more freedom to make up its own mind about interest rates.

Does this mean the pound no longer matters? No. The Government is still worried about letting the pound fall too far, because it raises the price of imports. If the pound looks stable, interest rates could come down a little faster.

What will happen to:

Prices? They will rise a little, whatever happens. With the pound already worth less, it costs more to buy imports. Inflation will rise.

Sterling? The movement last night was an unreliable guide as hardly anybody was dealing. However, last night the pound was under heavy pressure, plunging by five pfennings. The interest rate reductions planned by the Chancellor are likely to have a much bigger influence. However, too big a cut would damage the pound.

French franc? The French government has been as committed to a strong currency and high interest rates as John Major. A yes vote, even a weak one, should help it reaffirm this policy.

Holiday costs? Higher, but maybe not in Italy, Spain and perhaps Ireland, which might devalue.

Recovery? Already looks like starting earlier, because of the lower pound and the expected fall in lending rates. Do not believe anybody who claims to know when. But when a recovery is kick-started by devaluation, it fizzles out faster.

Jobs? Unemployment will stop rising a year or more after the start of the recovery, which has been brought forward by last week's events.

House prices? They will be helped by lower mortgage rates, which will get the housing market moving earlier than otherwise. But nobody actually knows when.