Economic round up

So that was Christmas and now for 2011.

What can we expect?

Interest Rates.

Yes they will stay low but when the Bank of England sends out warning signs of rates "normalising" at 5%, the only way is up. Don't panic though this might take two or three years. Most economists put the start of the rise in the third quarter of 2011 but maybe the recent comments by Paul Fisher, Executive Director of Markets at the Bank of England, have brough this forward a quarter or so. The Chinese have just put their rates up over the Christmas period so this may open the floodgates a little, China playing an increasingly larger role in world economics, currently Eurozone friendly.

House Prices.

Staying low, probably throughout 2011, estimated price drop for next year at somewhere between 5% and 7%. Anyone looking to rent is finding it difficult to do so because  first time buyers cannot find the large deposits being asked by lenders and are forced to rent, pushing the yields up for those lucky enough to be able to afford to buy to let.

Unemployment

With over 2.5million unemployed and large staff cuts currently taking place in the public sector, it is hard to see how this is going to improve in 2011, though this figure is always the last indicator to improve in any recession.

Inflation

Over 3% and heading for 4%, despite Government target figures of 2%, with key elements looking to go higher, such as VAT,food, general energy pricing and mortgage repayments

Eurozone

Ireland has dropped down the list of wounded economies  thanks to recent massive loan guarantees but there are plenty of others queing up for the sharks to bite, so there will be regular sporadic attackes on eurozone members and of course the Euro.

Happy New Year? 

More likely a very hard one but Entrepreneurs can make the most of any business environment, so as the saying goes -  " When the going gets tough the tough get going".

2011 will present opportunitites for the SME sector that will need help and assistance from many relevant areas to survive so watch this space and New Business magazine throughout the New year and make sure you have a good one!