David Cameron struck a defiant note in his new year message, insisting Britain was on the “right track”, and pointing to the shrinking deficit and rising employment as signs of economic recovery.

The UK prime minister admitted 2012, when the economy dipped back into recession and austerity was extended to 2018, had been “tough”.

But he said the country can look forward to the future with “realism and optimism” at the start of 2013.

“Realism, because you can’t cure problems, that were decades in the making, overnight. There are no quick fixes and I wouldn’t claim otherwise,” he said on Sunday. “But we can be optimistic too because we are making tangible progress.”

Mr Cameron highlighted forecasts that the deficit has fallen by £13bn in the past year and that almost half a million more people are in work than last New Year.

His message came as an Opinium/Observer poll found 43 per cent of voters predict their personal finances to get worse in the next year, while only 20 per cent expect them to improve.

Mr Cameron said the coalition government was in a “hurry” to cut the deficit to improve Britain’s long-term prospects.

“Britain is in a global race to succeed today. It is a race with countries like China, India and Indonesia; a race for the jobs and opportunities of the future,” he said. “So when people say we can slow down on cutting our debts, we are saying no. We can’t win in this world with a great millstone of debt round our necks.”

The prime minister also chose to highlight the opening of more than 1,000 academy schools in the past year, the three-year council tax freeze and the biggest increase in the state pension as key government achievements.

The opposition Labour party accused the prime minister of failing to deliver for working people.

“It’s a case of more of the same from David Cameron,” said Michael Dugher MP, Labour’s vice-chair. “In his new year message, Cameron talks of people who work hard in this country but he’s the one hitting hard-working families on lower and middle incomes whilst cutting taxes for millionaires.”

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