So 2010 has ended and we all enter 2011 with heads held high, full of confidence; or do we ?
Last years was pretty grim, but the next year or two promise to be far worse. Already, I've seen petrol prices above 130p per litre and we know rail fares and postage prices are rising well ahead of inflation. Interest rates are artificially low, to the detriment of all those frugal folk who've managed to save a few coppers for their old age. Houses are still much too expensive for first time buyers in some parts of the country and rents are rising. The Eurozone is in crisis, Britain and the US are both struggling, trades unions are threatening serious action in pursuit of 'fair' pay. Where will it all end ?
For what it's worth, I think it will end badly. By this time next year, I can see the base interest rate much higher than now, at least 4.5% and probably higher; house prices may well fall back quite steeply as demand dries up even more, but rents will continue to rise, creating a nightmare scenario. Severe disruption through strike actions looks almost inevitable as does higher unemployment. Europe will survive but countries such as Greece, Portugal and Spain will suffer very badly; the US will become increasingly interested in the 2012 Presidential election and withdraw into itself.
The UK's coalition government may survive, but it seems certain to lose a few members at least. It's inconceivable that Vince Cable will still be in post come the year end and there must be a chance that we'll be confronted with at least a rearrangement of the coalition by then, if not total collapse. This was a marriage made in hell and only the desire to hang on to power will hold it together for long.
Roll on 2012.
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