Fear = Paralysis

 Labour now realises they may have over done the negativity of "pain", "hardship" etc.  Concern over what will be in Rachel's wonderful budget on the 30th Oct 2024 has now turned into fear.

I've personally seen it with friends ringing me seeking advice on how to access pension funds as they are now paranoid Labour will raid their pensions.  I've similarly taken action to protect my pension.  Sadly there's not much data available yet on capital flight from pensions but I wouldnt be surprised if billions have been drawn from the pension companies in the last few months (potentially causing them liquidity challenges).

We are already seeing an exodus of the rich moving out of the UK.

Humans are hard wired to respond to  fear.  One reaction is to freeze like a startled deer in the headlights.

I have personally seen this in the last week with a house sale.  I am selling up to avoid Starmergeddon rates of Capital Gains tax. Unfortunately my little old lady buyer has now pulled out - she is terrified of what Rachel and Starmer will do to her finances.  Net outcome no stamp duty for Rachel on this sale.  No CGT from me (before it's massively increased) - I probably will now never sell it wont be worth my while after tax. No revenue for the estate agent.  Less work for moving companies, builders, furniture stores etc.  This all impacts the economy.

If paralysis is happening at the little old lady level, imagine what all this negativity is doing to big business and other big ticket item investment.   This all feeds into recessionary behaviour.

Expect the economy to do bad this quarter.

If the budget turns out to be as bad as the predictions then expect real economic challenges.

Fear (of what Labour will do)  = paralysis.