We know from the recent 'Observer poll' that 84% of local residents believe that the town has improved significantly over the past 10 years and, whatever the media say, the facts speak for themselves.

Here in Hastings, unemployment has nearly halved since 1997. Indeed the figures published this week, showing a further fall of 220 in the jobless figures in the last year alone, is a reflection of what's happened across the country. All in all a million fewer are jobless now than in 1997. And importantly long-term (that's over a year) youth unemployment has been virtually eradicated.

So, with historically low inflation (I appreciate, of course, that fuel bills are an exception to that) and growth (that's the increase in productivity year on year) currently at 3.1%, one has to wonder why the stock market has been rollercoasting this week.

The truth is, we now live in a world economy and it's been said before, when America catches cold, Europe catches flu. The strength of our economy depends on what we buy and sell and if no-one has the money to buy then that's a problem. The current challenge started in America when Sub Prime Mortgage Companies, made loans at high rates to people who could not afford to repay.

Many defaulted, house properties fell and thus the credit squeeze that we now know about. The knock-on effect is that, as the American market slows (remember it's the biggest market in the world) then the rest of us suffer.

Some forecast a recession, which is when 'growth', which I referred to before, goes negative. That is to say in layman's terms that the wealth we create one year is less than we created the year before. That means, in turn, that we all have less to share out, be it personally or through our public services.

So can we escape the trend or should we panic?

My guess is that we cannot escape completely the effects of the American slowdown. But we are strongly placed to avoid recession because of our relatively strong economy. We have the lowest unemployment in Europe. We have the highest rate of growth (at present) in the G7 (that's the world's seven largest industrial countries). Inflation is half that of America. Interest rates are still low and sustainable. But we do also have to be careful. An explosion in public spending now would be disastrous, as would excessive pay rises, albeit much needed to maintain our standards of living.

I have no doubt that in the coming year many of us will feel less confident than in the past but 'don't panic' is the message we need to herald. Our strong and stable economy has been hard won and we must never forget that those most badly affected, if recession strikes, are those less able to defend themselves- pensioners, those on low incomes and, in turn, those who depend on public services, which would be more difficult to afford.