More deficit! More! A quick summary for those who have just joined us...
The dollar is stunned, but the Japanese are looking after it for the moment. The pound is stronger than the Euro, which is stronger than the dollar, which is stronger than the Yen, so basically nobody's buying anything from the UK. Meanwhile the British public like their massive debt, helped by the fact that we can buy foreign things easily. This means little money coming in - we are spending to make ourselves rich, but in the process we are, uh, making ourselves poor.
The way I see it, our economy is therefore in the hands of the Japanese. If they can't hold the dollar up, things fall, markets get very unsteady, and people start losing jobs. When people start losing jobs, they a). stop spending, and b). sell off stuff that's risky or expensive. a) means that there are less jobs, probably in the manufacturing sector (which has already been hit by the shaky market fear), and b) means that all the people who have bought-to-let will start selling off their second homes pretty quickly (with prices helped on the way down by the fact that people aren't spending as much).
And to cap it all off, beer prices will probably still go up.