Marmite, Brexit: both are sticky, strongly flavoured and loved or hated in about even measure. So it is rather appropriate that the row and ensuing panic over a hike in the price of the yeasty spread was the moment when we could say that we passed peak euphoria for the Brexiters.

In the immediate aftermath of the referendum, they felt entitled to be extremely pleased with themselves. They won when most of them expected to lose. They destroyed the prime minister who tried to stop them and punched the establishment in the mouth. Remainers who had warned that divorcing the EU would unleash severe economic shocks were left looking a bit foolish because those consequences did not materialise immediately.

The Outers had a success during the referendum in persuading many voters to ignore the “so-called” experts on the other side and their cautions that there would be a steep bill to pay. You may recall that some of those much-derided experts did predict that Brexit would trigger a fall in the value of the pound with the result that the prices of many household goods would go up. You may also recall that this was dismissed as “scare-mongering” by “Project Fear”.

Now some of the consequences of Brexit are beginning to knock on the door. The loudest knock – more of an almighty crash, actually – is the tumble in the value of the pound. It has slumped a long way against the euro and plunged even more dramatically against the dollar. “Take back control” served the Outers well as a referendum campaign slogan. It was probably their most effective persuader. It was also a highly misleading guide to what would happen in a world in which a government does not have unalloyed sovereignty even over its currency. A pound is only worth as much as the world is willing to pay for it. If the world starts to believe that Britain’s economic prospects have darkened and that the country has become a less attractive destination for foreign investment, then the world will be less inclined to hold pounds. If the world starts to think that Britain is becoming less politically stable, a more unpredictable place to do business and a more risky country to lend to, then the world will be even less enthusiastic about owning pounds.

The slumping value of sterling tells us that this is exactly what the world now thinks. Markets are reacting to a government that is on a trajectory towards a “hard” Brexit that will be incompatible with remaining within the single market and may well see Britain’s departure from the European customs union as well. Companies are becoming spooked as they grasp how protracted the negotiation with the EU is going to be. Those company bosses who have managed to secure time with the ministers in charge of the process come away not reassured by the conversations, but more disturbed. They shudder that the people who are supposed to be directing the process don’t really know what they are doing or agree with one another about where they are headed.

The Brexiter ministers continue to insist that ultimately the EU will want to give Britain a sweetheart deal

The pound has become a “political currency” and not in a good way. It would be a mistake to think that the rest of the globe follows every cough and splutter of our domestic debates, but they do hear enough of it to catch the general drift. The noise coming out of the mouths of senior Tories at their party conference was belligerent enough to be heard everywhere. It broadcast the message that Mrs May’s Britain is turning hostile to talent and investment from abroad. The government has since rowed back on some of it, executing a forced retreat from the idea of compelling businesses to declare how many of their staff are from other countries, but the overall tone still echoes in everyone’s ears.

The martial music played by senior Tories is now being reciprocated from the other side of the channel. There is a toughening of the language being used by EU leaders and even by figures who were originally seen as conciliators. Donald Tusk, the president of the European Council, has generally been regarded as more sympathetic to Britain and more willing to help achieve a gentle uncoupling rather than an acrimonious rupture. A member of the cabinet to whom I spoke recently identified Mr Tusk as the man they hoped that they could do business with rather than Jean-Claude Juncker and a European commission that is seen as determined to follow a “punishment strategy” of maximising the pain inflicted on Britain for jilting the EU. Yet it was Mr Tusk who last week made a point of ridiculing the “cake philosophy” of Boris Johnson, as in you can have your cake and eat it. Oh no you can’t, retorted Mr Tusk. He invited any adherents to the foreign secretary’s brand of magical thinking to conduct a simple experiment. Buy a cake, consume it and then take a look at what is left on the plate. The choice for Britain, he declared, was not soft or hard Brexit, but hard Brexit or no Brexit. That is a precise echo of what the hard Brexiters in Mrs May’s government are saying.

The Brexiter ministers continue to insist that ultimately the EU will want to give Britain a sweetheart deal. Everything coming back from the other side suggests the opposite and for entirely understandable reasons. European leaders are not wavering in the clarity with which they declare that Britain cannot be seen to get a better deal from being outside the EU than it had as a member. They will be able to give that message in person to Mrs May this week when she travels to Brussels for her first European Council as prime minister.

There is a risk to making any comment on the falling pound; the risk is to be accused of being a poor loser, a “Remoaner”, a miserable naysayer who refuses to embrace the wonderful vista of opportunities that are presented by having a collapsing currency. It is true that there are some upsides to a plunging pound. It will make some British exports more competitive, provided that their manufacture doesn’t rely on a lot of imported parts. Higher prices for things made abroad may encourage Britons to reduce their appetite for imported goods, which would help to close our yawning trade deficit. The cut-price pound will also make Britain a bargain destination for tourists. Nigel Farage will be able to celebrate all the extra foreigners that Brexit is drawing to our shores.

But it is another delusion to think that devaluation is a perfect economic tonic. If it were that, Britain should already be the envy of the world. Since we came off the gold standard in the 1930s, when a pound bought five dollars, this country has experienced a lot of devaluations, planned and unplanned. If making your currency cheaper was the route to riches, our streets ought to be encrusted with diamonds by now.

The main political consequence of a falling pound will be felt in a spike in inflation. We will be paying more for petrol, clothing, food, electrical goods and all the other stuff that this country buys from abroad. Inflation, which has been dormant for a considerable period, is set to have a resurgence in its salience as a political issue. The governor of the Bank of England is right to say that these price rises will inflict the hardest hit on those least able to bear it, because people on lower wages spend proportionately more of their income on the things that are going to get more expensive. A rise in inflation will also impact on the cost of anything that is index-linked, which means paying more for everything from rail fares to water.

It is already worrying ministers that increased inflation will also have a significant knock-on effect for the government’s finances, which weren’t exactly in rude health before this happened. Among other things, it will make it more expensive for the government to keep its pricey promise to increase the state pension by at least inflation. It will add further pressure on public services, not least the NHS. If the cost of living is going up, public sector workers will think they deserve a compensating rise in pay and will become seriously discontented if they don’t get it. Mrs May inherited a policy of freezing benefits and credits for lower-paid workers. The pain for those subjected to that freeze will be increased if their cost of living is escalating. Private sector workers will either extract wage rises from their employers to offset increases in prices, with all the further consequences that has, or they will suffer a degradation in their living standards. The number of people who are only “just about managing”, to use Mrs May’s phrase, will increase. So will the number who can’t manage.

But I don’t want to sound like a “Remoaner”, so I am delighted to report that there will be one group of people for whom a plunging pound is very good news indeed. London property has just become massively cheaper if you are a foreign buyer. For holders of dollars and euros and other “citizens of the world”, the sale is now on. Britain is becoming a poundland bargain – so long as you don’t actually earn your living here.