There are hard times to come.

 As 2011 rolls out before us it is becoming apparent just how difficult this year is going to be.

It also marks the start of the Chinese New Year. The Chinese calendar differs in that it is made up of a cycle of twelve years, each Chinese year being named after an animal. This year is the year of the rabbit.

So if it is a good Chinese year there is much time to revel, but if the outcome is poor we are in for a very long haul.

Let us hope for lucky rabbits.

I looked up austerity in the Oxford dictionary and is said, ‘Difficult economic conditions created by government measures to reduce public expenditure.’ Well they got that right.

Our Conlib government has implemented an austerity regime that is reverberating throughout our society. Their required spending cuts will result in the loss of thousands of UK jobs. There is unlikely to be any growth in exports, consumer spending will be cautious and constrained; so in turn economic growth will remain weak.

It has been tough convincing the voting public to tolerate the very real pain of reduced spending power to repair the public finances, especially when many voters attribute the fiscal damage to greedy bankers and gross government incompetence.

The annual rate of inflation rose to 3.7% in December from 3.3% in November, and this does not include mortgage rates. However, by the broadest measure of consumer prices, the inflation rate rose to 4.8% from 4.7%.

The Bank of England are likely to maintain the bank rate at 0.5% for the time being, but this may come under pressure if inflation continues on an upward trend.

High rates of inflation may yet become a monetary policy concern that accelerates voter discontent into a major political issue. The glue holding the Conlibs together will be severely tested as the coalition begins to feel the heat.

So if you see a rabbit hopping about whilst you are on your travels check it has all of its feet and hope the bunny stays lucky in that respect; then hope that 2011 will be lucky for us all.