Clegg warns of tough times ahead

The Deputy prime minister has warned consumers with debt problems that the economic hard times are far from over.

In his new year message to party members, the Liberal Democrat leader said: "This time last year I spoke about how the most important job for Liberal Democrats was dealing with the economic problems we inherited. Twelve months on, that task remains the number one priority for our party and the coalition."

He added: "That economic rescue mission is not over yet."

While Mr Clegg talked about the importance of rebalancing the economy away from financial services and of his party's role in trying to ensure there is plenty of "fairness" about the actions taken through changes to tax and pensions, this underlying warning may suggest many difficulties lie ahead.

And with the eurozone crisis still looming – an issue that led to tensions with the Conservatives over David Cameron's refusal to sign a new treaty that could have seen a financial tax imposed on the City of London – Britain may yet get dragged into a new recession.

The Chartered Institute of Personnel and Development has said the UK is set to see its unemployment level rise to 2.85 million by 2013.

Chief economic adviser at the organisation John Philpott said the likely rise in joblessness would be "milder" than in the 2008-09 recession as long as the eurozone situation has a "relatively benign outcome", but because it was starting from a much higher base, would lead to the greatest number out of work since the early 1990s.
  
By Joe White