Byline: ANTHONY HILTON
FOUR weeks ago, the housing market was in the doldrums, personal bankruptcies were at an all-time high, inflation was edging up, the Government's finances seemed to be unravelling and no one seemed to care.
Labour sailed into the election on a sea of confidence, believing - rightly as it turned out - that Chancellor Gordon Brown would win it for them.
And that he did. Voters looked at the economy, looked at their wallets and purses and saw no real need to change.
But that was then, and now is now.
Elections are supposed to clear the air, deliver certainty and let everyone get on with their lives. Not this one, though. Barely had the votes been counted than the mood began to change. Business and consumer confidence has dissipated with astonishing speed, going (in the words of some old political slogans) from "you've never had it so good" to "you've had it" in the blink of an eye. This is not just an a illusion. The public mood normally changes slowly, but this has some hard financial numbers backing it up.
The most sensitive economic indicator of all is the volume of money spent on advertising, because it plays into people's willingness to spend, which they do when they are feeling comfortable. But here, too, the news is bleak. The volume of advertising on television, commercial radio and newspapers tailed off before the election, as it usually does, and was expected to bounce back later - again, as it usually does - once the uncertainty was out of the way.
But this time there has been no bounce.
Quite the opposite. In many markets the spend is 20 per cent lower than it was last year.
What is worrying is that no economy can go on like this for long without it affecting other things. If people don't spend, retail sales fall, stock builds up in factories, shops are forced to close and people get laid off.
True, much of what is sold in shops these days does not get manufactured in this country, but the truth still holds. There are enough jobs in distribution, retail and associated services for it to hurt. Then, if people lose their jobs, that mortgage which was always going to be a bit of a struggle becomes an impossible burden.
Multiply that across the country and you get a rash of houses coming on to the market from people who have to sell because they can't afford the payments any more, coupled with no buyers because they think that once prices start falling, they will fall further.
It is not high interest rates that cause housing markets to fall, because people do everything they can to meet the payments rather than lose their home. The crunch comes when - through illness, divorce or unemployment - that simply becomes impossible.
Things are nowhere near that bad, but the change in recent weeks is that people probably now sense they could be, whereas earlier in the spring it simply never entered their heads. All the talk of tax rises in the election, whether or not it turns out to be true, has made people think that they are not going to have as much money in their pockets next year as this.
So without doing anything dramatic they have decided to rein in their spending, to pay a bit more off the credit card and to try to build up a protective buffer against tougher times. …