We are on a boat and the wind is getting up, it is a harsh wind which promises a change in the weather…..

The council have decided to up the amount due to them on an annual basis, they have arbitrarily decided that this rise in council tax will be around 8% in my region. I would much prefer it if they, instead, looked at ways of cutting down on expenditure.

At the same time the utility suppliers such as EDF Energy and British Gas ( who both posted record profits last year ) have announced > 10 % hikes in charges for gas and electricity.

Whilst interest rates have been held down for a while now, there is sure to be an uncontrollable creep upwards in the near future, although the Bank of England and the Treasury are assuring us that all is fine, I can see the water seeping into our boat ever so steadily and it is only a matter of time until everyone has wet feet.

and then the proverbial will really hit the fan…

Irrespective of the value of your property, and we have been promised a huge fall in house prices, leading to negative equity and vast debts for many, interest rises willup the payments and lead to further debt. Increased cost of living will mean less money in our pockets for spending, and hence to a decrease in spending and a decrease in income for the service sector.

What can we do to protect ourselves in the face of this looming recession ?

It is suggested you start acting as though you are poor, really poor, start managing your debts as if you were already struggling ( even if you are not already). Base your budgeting on, say 75% of your present income and you will balance your books now in readiness for what is likely to happen in the next few years.

Baton down those hatches, oil the canvases and get ready for the storm, as it is coming, be sure of that.