The dark, rain-filled summer of 2016 washed away 40 years of political and economic certainty, as Britain (or, more precisely, England and Wales) voted for Brexit. Now it has to begin the process of leaving.
But serious negotiations will not start until after France, and then Germany, have held their national elections. Until these are safely done and dusted, there will be plenty of rhetorical positioning, but few meaningful decisions, let alone concessions to the UK. Even if Article 50 - the formal notification of the UK's intention to quit - is triggered as announced in March, the real deal-making will only begin once a new French president and German chancellor are in office in the autumn. The phoney war may rage on, but for the business community, the waiting has only just begun.
We are about to experience how uncertainty inhibits investment. Until businesses know whether Britain will stay in the European single market, and on what terms, they will move cautiously. But trading at a deficit with the world, Brexit Britain is reliant on the kindness of strangers to pay its bills. Productivity has slumped. Recession looms again.
Read more: What Theresa May's Brexit plans could mean for you, your data and your privacy
Brexit boosterism - in which Britain rides the high seas of global free trade - will not solve these problems. Instead, economic policy will have to change. Prime minister Theresa May has junked her predecessor's fiscal framework, promising to let government borrowing and the deficit rise. Her chancellor, Philip Hammond, is hawkish, so there will be no splurge on the public finances. But infrastructure spending will be stepped up. May will want to get Britain building in 2017.
The new prime minister's economic instincts are pre-Thatcherite, redolent of her party's post-war One Nation traditions. She favours government intervention in the economy to promote business sectors such as motoring and pharmaceuticals, using the term "industrial strategy" without embarrassment (even bestowing it upon a new government team, the Department of Business, Energy and Industrial Strategy). She promises reforms to corporate law to restrain pay inequality. She looks to cities to promote regional economic growth.
These are tools of economic policymaking rarely deployed in recent years. Unorthodox measures have been the preserve of central banks, but having used up much of its firepower escaping the great financial crisis, the British state will have to become more active as an economic actor in 2017. Letting spending take the strain again will be just the start: sustaining economic growth and spreading it to the post-industrial heartlands of Brexit Britain will demand more creativity from policymakers.
Economic precarity is matched by social division in Brexit Britain. The referendum split Britain down the middle on almost every conceivable social cleavage: young versus old; working versus middle class; city versus town and country; nationalists versus unionists. These fractures were felt at first in racist incidents, puncturing the country's liberal self-image of contented cosmopolitanism. European Union migrants will feel its uncertainties for longer, until the British government bows to the inevitable and guarantees their citizenship in the UK.
But the flow of immigration into the UK may now subside, as economic growth slows and Britain becomes a less open destination. For much of the Brexit electorate, this will be welcome: their votes were cast to put an end to free movement of labour. Rapid, unsettling change drove many older, socially conservative voters to the polls.
But what country did they vote to "take back"? The unity of the United Kingdom itself, already threatened by the rise of a powerful Scottish nationalism, is now decidedly fragile. Scotland does not want to be taken out of the European Union. Northern Ireland does not want immigration and customs posts to run along its border with the Republic of Ireland. England's place in the union she constructed for herself over the centuries is now imperilled as never before.
Historically, the Conservative Party has been the champion of unionism, but its statecraft will be tested to the limits by the agile and determined leadership of Scotland's first minister Nicola Sturgeon, and by the tortuous politics of negotiation in Northern Ireland.
Read more: On the anniversary of the EU vote, here are eight ways Brexit has hit science, tech and design
Only a looser democratic federalism is likely to keep the UK together, and this will need to embrace a new political settlement for England, as well as Scotland, Wales and Northern Ireland. England's towns and cities will demand more devolution and calls for an English parliament will multiply. London - a capital city that has become a metropolis floating free of its host country - will nurse its own prosperity and pursue its own ambitions. It too has the political leadership to match its self-confidence.
Watching from the sidelines, Labour's agonies will likely endure throughout 2017. A hollowed-out, centrist party has been colonised by an insurgent left. Many are hardened sectarians, while others are day-trippers. But they have changed the party irrevocably. It is neither the mass working-class party of the 20th century, nor the election-focused machine of the Blair years. It has bought a certain kind of democracy but at an electoral price: it stands at a considerable distance from its voters, and they are likely to look elsewhere for representation.
As Labour frays and declines, Britain's fractured and pluralist politics have become unbalanced, tilting power to the right. Unless it can get its act together, 2017 will be another bleak year for progressive Britain.
In 1992, Bill Clinton's election as US president prefigured the start of a transatlantic revival of the centre-left. In 2017, Washington will look to Berlin first as the premier source of power in Europe. The international community will not cold-shoulder Britain, but the brave new world of Brexit will be a tougher one. We will make a success of it, says the prime minister and her buccaneering Brexiteer ministers. But choppy waters lap at the shores of this island nation.
Nick Pearce was head of policy in Gordon Brown's cabinet and director of the Institute for Policy Research. He now teaches at the University of Bath.
The WIRED World in 2017is WIRED's fifth annual trends briefing, predicting what's coming next in the worlds of technology, science and design
This article was originally published by WIRED UK
