Britain’s government is badly divided over Brexit, its economy is slowing and the latest official forecasts suggest living standards will be squeezed for years to come.

Yet as the government prepares for a critical phase in negotiations to leave the EU, Steve Musto is brimming with optimism. This is because Mr Musto, an ardent Brexiter from south Wales, is convinced the UK is holding all the cards.

“They’re frightened to death of us leaving!” he exclaimed on a recent afternoon as he stuffed cash into envelopes for his staff at the King’s Head, a pub and hotel in the town of Usk that served as a clubhouse for Welsh Brexit campaigners during the EU referendum.

The gregarious 67-year-old had ready advice for Theresa May, the beleaguered prime minister, who has steadily ceded ground to Brussels in the Brexit talks: walk away. Leave the negotiating table and watch as the Germans come grovelling for a deal.

“It’s like buying a car,” Mr Musto said. “If you play a game of bluff, you’ve got to have belief in the strength of your hand.”

His buoyant mood about Brexit is common among fellow Leave voters in south Wales and contrasts starkly with the deepening gloom felt by many Remainers, particularly in metropolitan areas such as London, who look at the same situation and statistics and can only see disaster ahead.

It is a reminder that the deep split in the British electorate has not healed since the referendum in June 2016. Its competing tribes continue to inhabit separate universes. A series of recent surveys conducted by polling company YouGov suggested they had different views not only about the merits of the European Court of Justice but also steak, sex, the BBC and much else.

“There is very little evidence, if any, that Leavers and Remainers are changing their minds,” said Matthew Goodwin, a politics professor at the University of Kent. “While all voters have become a little more pessimistic about the economic effects of Brexit, we need to consider that against evidence that for Leavers the vote for Brexit was driven chiefly by non-economic factors.”

This may explain why Wales — which contains some of the poorest areas in the UK — supported Brexit by 52.5 per cent to 47.5 per cent in spite of receiving EU funding aimed at reducing income disparities.

Laura McAllister, a political scientist at Cardiff University, argued that for many in Wales the referendum was less about the EU than a sense of social and economic alienation. “It was a rebellion against the status quo and the poverty that many people in Wales feel,” she said, adding: “The people who voted Leave are still Leavers.”

May is a quisling as far as I’m concerned. We have a strong hand but she doesn’t want it

Such divisions have left Mrs May on difficult ground as she prepares for a summit next month where her government is hoping to convince the other EU member states to settle divorce issues — particularly money — to move to negotiations about a future relationship. Concessions that seem reasonable to roughly half of Britain may invite scorn from the rest.

There are already signs of that, with many Leavers complaining that the prime minister — who quietly favoured Remain but did not campaign for it — is preparing to disappoint them.

“I don’t trust Theresa May. I don’t think she’s strong enough,” said Mel Eason, 69, a King’s Head denizen whose hearing has been dulled by the years he spent working in south Wales’ coal mines.

Mr Eason views Brexit as a patriotic sacrifice to preserve Britain for his grandchildren. He takes umbrage at the notion that the UK should pay the EU tens of billions of pounds — as Mrs May is preparing to do — to settle previous commitments. “I don’t think we should pay them a penny!” he fumed.

To Kevin Boucher, a recently retired autoworker from Pontnewynydd — a neighbourhood just down the road from a now shuttered colliery — Mrs May’s behaviour is traitorous.

“She’s a quisling as far as I’m concerned,” he said. “We have a strong hand . . . [but] she doesn’t want it.”

One thing underpinning many Brexiters’ confidence in Britain’s position is the belief that the country will be just fine without any preferential trade deal with the EU securing access to the bloc’s single market. So they argue the UK — not the EU — has the leverage in the Brexit talks.

They tend to dismiss the warnings of big job losses by banks in the City of London and the CBI, Britain’s biggest employers’ group, if there is no post-Brexit transition deal with the EU as just more of the scaremongering they believe Remainers engaged in during the referendum campaign. The fact that the sky has not fallen in and life has changed little on the ground in south Wales since the Brexit vote has only deepened their conviction.

“There are people queueing up to have trade deals with us,” said Mr Boucher’s wife Sue, citing Australia and New Zealand.

Neither Mr or Mrs Boucher trust the BBC — and its reports of mounting Brexit costs — so they seek alternative sources of news. “He’s constantly on YouTube, looking for stuff,” Mrs Boucher said of her husband.

During the referendum, she was the secretary for the anti-EU UK Independence party in Torfaen, the south Wales county that encompasses Pontnewynydd.

Her Ukip membership has lapsed but her Brexit fervour remains strong. In fact, her only apparent regret is that the fall in the value of the pound since the EU referendum may foil the Bouchers’ plan to sell their house and retire to Spain.

In nearby Pontypool, Anthony Hunt, the Labour leader of Torfaen council, reflects on the difficulties of convincing voters of the EU’s benefits. Torfaen backed Brexit by a 60:40 margin.

“We weren’t able to explain to people in communities like this why a Remain vote would be good for them and their families,” said Mr Hunt, a young lawyer who voted Remain in the referendum.

Sitting in his office above a gloomy high street, he worries about what will happen to Torfaen after Brexit, with the loss of EU funds that have helped to prop up an area that was once an industrial powerhouse but now struggles with child poverty.

Some Brexit voters have expressed regrets to him about their vote, he said, but many others have not. “There’s a block of people that would still vote the same way. That’s undeniable,” added Mr Hunt. “It might be inconvenient [for some people] but we can’t dismiss it.”

Mr Musto, for one, has no intention of changing his mind about Brexit. “I’m sure it must irritate some people,” he said, “because I’m still euphoric!”