Thought 2016 was turbulent? Trust me, the revolution is just beginning: The true cost of Brexit, a backlash in France and a new cold war - 2017 is set to be far bumpier, writes ROBERT PESTON 

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It was the Great Rejection – 2016 was when people in Britain and America chucked out the traditional way of running their respective countries. This year we'll learn whether we have started a global revolt and whether we have made ourselves richer, poorer, safer or more vulnerable.

Fog will hang over the new political and economic landscape for a while yet. But we should be in no doubt that there has been an earthquake and we are living through changes to our lives and livelihoods more important even than the momentous transfer of economic power from the state to the private sector by Thatcher and Reagan in the 1980s, and the consequent collapse of communism.

Now in some ways the timing of the revolt against the Establishment was odd, because those on lower incomes in Britain and America – angry that their earnings had gone nowhere for years – voted to throw the old guard out the window just when their living standards were beginning to improve. But there was a prevailing sense that the way we've been running the global economy for 30 years will only ever enrich a plutocracy and no one else, and enough was enough.

What Trump, Farage and Boris Johnson did so brilliantly was to feel and express the pain of the dispossessed many. People like me may have hated their wilful disregard of facts and their illiberal tropes (yes, you Boris). But the only truth that matters now is that they won.

Which is why our own new Prime Minister Theresa May has set as her priorities reining in the excesses of the private sector, controlling immigration and frantically trying to reform the economy so that we produce more for less and wages could rise year after year.

It will be at least ten years before we know whether that vote to leave the EU will make us richer or poorer. My view is our earnings will be less than they would otherwise have been over that time, as we will struggle to grow fast enough in new markets to replace trade we will lose with the EU.

To put on my old economics editor's hat, we will be poorer in 2017 than we would have been without the referendum result.

That is because the pound collapsed as a direct result of it and is pushing up inflation.

Those who run our biggest companies tell me they will start to put up prices in a more significant way – for the stuff we all have to buy, such as food – in lumps between now and the middle of the year.

The price of imported electrical items could rise by as much as a fifth. So our earnings will go less far. Will the economy actually shrink, will we enter recession? I doubt it.

Donald Trump will become President of the United States, taking over from Barack Obama in 2017

Funnily enough, Trump could ease the short-term Brexit pain with his promise to deliver the mother of all government borrowing and spending splurges, to renew America's crumbling infrastructure and build that notorious Mexican wall.

The US remains the world's biggest economy and the biggest national market for our companies, so a Trump boom could help. That said, the bigger any debt-fuelled spending splurge by Trump turns out to be, the greater the danger of a disastrous bust in a few years (sorry).

So 2017 will be neither economic armageddon nor party time. And unless inflation starts to accelerate in an uncontrollable manner, which is unlikely, interest rates won't start to rise until 2018.

It is not just the economy at a crossroads. The relationship that will matter perhaps more than any other for our peace and stability will be between Trump and Vladimir Putin. The Russian leader will be more adventurous in his interference in the Middle East, the states of the former Soviet Union and around the Baltic, to test whether Trump's commitment to Nato is as lukewarm as it seems.

But if there is to be a second Cold War it will be between the US and China – under its most autocratic leader since Mao in President Xi Jinping.

Theresa May will trigger Article 50, formally starting Britain’s exit from Europe. Pictured: Foreign Secretary Boris Johnson

In the coming year, Xi will consolidate his grip on all the machinery of the vast Chinese state at the 19th National Congress of the Chinese Communist Party. His claim to territory in the South China Sea, rejected by the US, is already a source of tension between the world's two biggest economies – exacerbated by Trump's extraordinary decision to alienate Beijing by talking to the president of Taiwan, and by his determination to make it harder for China to sell to America.

And then there is the question of whether Brexit becomes Frexit. My view for some time has been that Marine Le Pen, the leader of the Right-wing anti-EU Front National, will be France's next president – and although she can never admit as much, Theresa May should be hoping and praying for a Le Pen victory in May. Because with France electing a president who wants to tear up the rules of the EU's single market, the EU would be conspicuously doomed.

What about our politics in the coming year? Well, we'll see Theresa May desperately trying to define herself as more than the PM who muddled through – or so she hopes – in securing a withdrawal from the EU that she didn't want. But that exit is the biggest constitutional, technical and economic challenge faced by any government since at least the Second World War, leaving little spare capacity in Whitehall even for her main other priority – formulating a new immigration policy that doesn't starve the economy of talent.

As for the chalice she inherited from David Cameron, it included a health service perilously close to full capacity, a desperate shortage of care provision for the elderly, and rail commuters in a state of nervous breakdown.

There is also a chronic shortage of affordable housing, security services are on permanent alert for terrorist atrocities, and government debt is rising to levels many see as unsustainable.

Much can and will go wrong for her – and it will be all the worse if she continues to try to run everything in the way she ran the Home Office, which was to exert extraordinarily tight control both personally and via those officials closest to her.

Angela Merkel is seeking re-election as the Chancellor of Germany after vowing to deport the one million migrants she let in last year

My impression is she is beginning to lighten up. Needs must.

The first item in her New Year in-tray will be the verdict of the Supreme Court on whether she must have the authorisation of Parliament before she can give formal notification of our intention to leave the EU under Article 50. It is almost certain to reject her argument that she does not require the approval of MPs and Lords. Even so, MPs – fearful of a backlash – will give her the authorisation she needs.

And even if Her Majesty would like to know more about the Prime Minister's Brexit plan, please do not hold your breath for a detailed route map in coming weeks. Mrs May does not yet have such a map and will stick to her mantra that it would give her EU counterparts too great an advantage to have one.

In the unlikely event that MPs were to limit her negotiating mandate for Brexit, she might then be persuaded to dissolve Parliament and seek a popular mandate in a General Election. But her very closest colleagues insist that she does not believe the British people want another vote.

Right now her colleagues are bamboozled by the complexity of the Brexit plan the civil service is working on for her – namely a series of customised trade deals with the EU covering almost 60 different sectors of the British economy.

Now, for the avoidance of doubt, even if the rest of the EU approaches these talks in a constructive friendly spirit – and I regard that as highly unlikely – it will take years for those deals to be negotiated and finalised, far longer than the two years allocated by Article 50.

That is why it matters that she has started to talk about needing an 'implementation' period for Brexit, or a number of years of transition – although, hilariously, the word 'transition' is banned in Downing Street. Critics of the EU, including her own most important adviser, Nick Timothy, see 'transition' as potentially never ending, and therefore a betrayal of the Brexit vote.

By the way, the notion that when it finally comes to the nitty-gritty of negotiations with the other 27 EU leaders Mrs May will get all that she desires, is for the birds.

The EU's survival massively trumps economic logic.

So even if French farmers and German car-makers would love to continue free, unfettered trade with Britain, far more important to the European elite is that they keep their own jobs and that the EU does not fall apart. They are adamant that no one must dump Brussels without fear of punishment.

In respect of Cabinet tantrums, squabbles and resignations, it's still early days – because when Theresa May finally solves her own annoying riddle about what Brexit means other than Brexit, some members of her Cabinet will flounce out or be sacked.

One senior member of the Cabinet told me that May is minded to bring in Iain Duncan Smith as a replacement for Liam Fox as negotiator of new international trade deals, and there is lots of chatter about Transport Secretary Chris Grayling being a short-dated Minister. This implies she expects to let down the Leave lot first and worst.

Of course, the most compelling relationship in the Cabinet is between May in her head teacher mode and Boris Johnson as a bright but naughty schoolboy. I doubt she'll expel him because he can be a lot more trouble outside the school gates than in.

Nigel Farage who led Ukip and battled to exit the European Union in the run up to the June referendum 

Which brings me to arguably one of her more serious political miscalculations, which was to exclude George Osborne from the Cabinet.

For all that he overplayed his hand in the referendum campaign, he is the towering political figure of his generation. He is probably the only politician in the country who could be the Roy Jenkins of this age and put together a cross-party coalition in favour of closer economic and political relations with the EU than many in the Tory Party will regard as acceptable.

On what matters to this country's future, he has more in common with Tony Blair, Nick Clegg and the pro-Europeans on the Right of Labour and in the Lib Dems than he does with Fox, Davis and Johnson.

If the PM cannot find a way fairly soon of bringing Osborne into her tent, he will emerge as the explicit or de facto leader of all those who oppose her on Europe. And he would become the second most serious threat to her grip on power.

Probably of lesser threat is a Labour Party going through the worst identity crisis since its creation. But the turmoil is quieter than immediately after the Brexit vote and Owen Smith's risible challenge for the leadership.

Most Labour MPs have decided to give Jeremy Corbyn as much rope as he wants. They are assuming, probably naively, that he will hang himself if Labour's fortunes don't improve in the polls.

History, however, suggests he will cling on, in any climate, aided by a huge party membership that may no longer worship him but cannot yet see an alternative.

At some point there will be a fundamental realignment of party structures of a magnitude we haven't seen since Labour marginalised the Liberals almost 100 years ago. But it may not happen this year.

So the most serious danger to May's grip on office, as it is to all Western leaders, are we – you – the people. The most important phenomenon of the past year has been the anger felt by millions about a world they rightly perceive to be run for the benefit of a privileged few, and not for them.

There has been a more effective revolt against the Establishment, against those now sneeringly denigrated as the liberal elite, than anything we've witnessed since the 1920s and 1930s.

This means that Trump has taken an extraordinary risk in promising to 'drain the swamp' of the usual suspects in government and then appointing billionaires and Goldman Sachs bankers to the top jobs.

Theresa May is vulnerable for as long as Brexit is a plan rather than a reality.

And both will be in trouble if they don't deliver rises in living standards for those in the middle and at the bottom – which will be as quick and easy as putting a tanker into reverse in a Force 10 gale.

What should keep them awake at night is that we the people have learned we can change very big things, we've acquired a taste for power and we won't settle for less than we've bought.

Important as the votes for Trump and Brexit have been, they are just the start of a revolution, a milestone on a much longer journey.