We started the year with rising confidence, evidence suggesting that the economy was finally turning a corner, with falling inflation, several interest rate cuts, and a modest but steady recovery in the market.
But as we saw with Covid and then the Ukraine War, these things are easily thrown off course by geopolitical events which are beyond our control.
So aside from the human cost of the war in the Middle East, the economic damage to every economy around the globe has once again knocked confidence.
It is unfortunately evident in the housing market, too: average UK house prices fell by 0.5pc in March, according to figures released by Halifax this week.
Fortunately, on the day these figures were released we learned of the two-week ceasefire in Iran, something which was almost immediately reflected in a stock market bounce and a substantial dip in the price of crude oil.
Time will tell whether this is just a temporary lull in the conflict, or whether it signals a move towards peace and a resumption of normal activity in global markets. The rapid market recovery on Wednesday does suggest that many are optimistic that it signals a return to peace.
It is likely that an end to the war will result in normality returning to the economy relatively quickly. The temporary spike in inflation may well delay further interest rate cuts, but we can hope at least that talk of rates bouncing back up will disappear.
That 0.5pc dip in house prices in March may well end up being something of a blip. Let’s not forget that they rose by 0.3pc in February, and even with the March decrease, they are still 0.8pc ahead of this time last year, according to the Halifax House Price Index.
Halifax itself has been reported as saying that “house prices may prove resilient, even if uncertainty weighs on market activity in the near term”. These words were written before news of the Middle East ceasefire; I suspect they would be even more optimistic had they been penned 24 hours later.
When we came out of the pandemic, many commentators talked about a ‘new normal’. I suspect we will once again have to learn to live with a new normal of more global uncertainty.
But as with every geopolitical shock which has come our way, we have learned to live with it, and life goes on. That old war-time advice ‘Keep Calm and Carry On’ seems particularly apt right now.
For more information, visit arnoldskeys.com