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Page last updated at 09:54 GMT, Friday, 6 January 2012

Cameron: 'It is a difficult year'

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David Cameron has warned of another "testing year" ahead for households but said he hoped inflation would fall in the coming months to ease some of the pressure.

Speaking to Evan Davis, the prime minister insisted there were positive signs in the economy in relation to private sector investment, employment and exports.

But he acknowledged that difficulties remained and that it would be "a difficult year" for the UK economy.

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