As proven by US case, low rate of 1% is not enough. Those consumers need a bonus like resale of goods or houses with 15 to 30% benefit.
Low rate message to the mob: Money has no value. Time to play with it.
Psychologicaly and economicaly rates under 3 are a joke for them and now for all of us.

rivenq, Montreal,

If the UK cuts interest rates as suggested Sterling will fall another 15% against the USD by Christmas and price inflation will be rampant. No cuts in rates. Borrowers will have to capitalise some of their interest against collateral- property, pensions, etc - they have to back loans.

Damian, Brighton, uk

The talk is all about redistribution. Low interest rates combined with high price and wages inflation leave property in the hands of most of the current mortgage borrowers. The opposite scenario is repossesions; sale by auction to the same upper 1% and accomplishing another turn of a spiral.

Slawomir Wojcik, Ipswich, UK

Surely a large and sudden cut in interest rates relative to the Eurozone will make imports more expensive, to some extent fuelling inflation? And if the government piles in public sector investment, as it promises to, this will compound the problem. That's a short-term fix with a big long-term price

J Dunn, Edinburgh, UK

I think you can see how this recession has arisen by the fact that the discussion on interest rates is entirely from a borrower's perspective. Has anyone thought what annuity rates are going to be? What happens to the saving rate when real interest rates are 5% negative?

Ned Ludd, Norwich,

If there is to be any move in interst rates it should be upwards.
In the here and now, the inflation threat is the worst for a decade.Never mind for the moment what may happen on the inflation front. Government, businesses and households are each over-borrowed. The pain is the price we pay.

CROFT, Ray, Hermanus,Western Cape,, SOUTH AFRICA.

Raise interest rates - don't blame the savers they have been the clever ones in this disaster - unfortuanately it is our own making this mess and the people who have been stupid with their money should and rightly suffer!

Alexander Lyne, ROSS-ON-WYE, UK

Anatole you keep discreditting yourself. You'll soon find yourself out of a job at this rate, whether it's a consequence of job cuts or otherwise. Further reducing of savings capital would be disastrous given the penchant for spending we have. People need to balance spending/saving.

Duncan, wokingham,

Those who live on interest income feel that reduced interest is unacceptable. It appears they have not grasped the point: when everyone with debt is wiped out by unemployment, their investments will be worthless. A national economy worth nothing produces savings in a currency worth nothing.

richard, horley, UK

UK interest rates should be reduced to zero and negative interest rates introduced to ensure lending is kept going and companies continue to re-invest in their businesses.

peter, chelmsford, England

It seems that the deteriorate economic situation is trying to make a bargain with the bank. The interest rate would never be considered like this i am afraid. It might be a misunderstanding, though as a reality, the economic becomes overshadowed, even more gloomy than before. Some more fundamental

Yabin Li, Shanghai, P.R.China

There are two types of people where money is concerned, Savers and Borrowers. Lowering the interest rates will punish savers and encourage borrowing too much. Which is what got many with mortgages into a no win situation.
This is short term thinking and will lead to more pain when the rates go up.

David Barton, Truro, England

Crazy debt levels both by banks, companies and individuals are the direct cause of the present financial catastrophe. And your solution, Mr Kaletsky, is to slash interest rates and thereby actively encourage even more debt for all concerned. Financial expert? - give me strength!

Bill Holmes, Derby, England

Interest rates should go up! Let's start looking after savers. The banks' mortgage rates are based on Libor - cuts in interest rates won't be passed on. This economic crisis has been caused by a combination of low interest rates and high asset prices. The cure isn't more of the same.

Andrew, Kings Lynn, UK

First, it was Helicopter Ben, now it's Helicopter Anatole. More reasons to cling onto your gold and study Zimbabwe.

William, Guildford, UK

It wasn't too low interest rates that got us into this mess. It was the reckless dishing out of credit by greedy bankers who fed irresponsible consumers. When interest rates drop to 2% tighter credit controls will also be needed. Say minimum 30% depsit on a house and no more than one credit card.

Chris, reigate, uk

Lowering interest rates is not the only action necessary. I am sorry to say (particularly to all you savers and pensioners) that an injection of new money i.e. printing the stuff is also required or else we will suffer the Japanese problem of the nineties. Governments are preparing this already.

Nigel Rawlings , Tonbridge,

Lowering the cost of credit is a necessary but not sufficinet condition for recovery. The problem for SMEs is the availability of credit. The Government should offer small businesses the opportunity to defer a quarters VAT payment for 18 months. This would supply liquidity to the real economy.

Tony Baron, narberth,

Now that the bankers have been bailed out by the taxpayers and are doing what they should have been doing - lending in a sensible way, rather than have cheap and easy credit - we have a call for lower interest rates and - cheaper and easier credit! Attracting sensible savers at 1%? - forget it.

Brian Watterson, Greenisland, Northern Ireland

I think lowering interest rates is quite right but I would do away with all the fixed rates, discounted rates and just have a mortgage rate.In housing, low interest rates haven't been the main problem, easy credit has been, with introductory rates which bear little relation to the actual rates.

rob, ashbourne, uk

Liquidity trap.....look it up.

John, London,

Of course there is a lot to say for lowering interest rates, but don't forget that many retired people and others look to a decent income from their hard-earned savings. If that income falls, they will spend less and thereby exacerbate the overall problems in the economy. (I'm one of 'em: I know!).

Geoffrey Woollard, Cambridge, England

Whenever economists as a group see a problem ahead they shout in unison "lower interest rates". So much for their "toolbox". Low real interest rates is what has brought us to this impasse.

In view of this, I recommend that savers be rewarded and that GDP not be placed on a pedestal.

Alfred, Portsmouth, UK

The UK has always had uncompetitive interest rates to make sterling and the city more attractive.

The priority now is to prevent unemployment rocketing to a post war high not forgetting the record migrant labour in the UK.

The BoE, however is likely to be as plodding as usual. .

John Collins, Bromley, Kent

Mr Kaletsky, you clearly have no idea whatsoever the amount of work involved to "suspend the mark-to-market accounting" - do you think the accounting systems, books and records of the global banking system simply operate on an on-off switch? Your ignorance is staggering.

John, London, UK

Anatole, throw the text book away. Low interest rates and easy credit fuelled the boom. That level of activity is over. Those policies cannot be perpetuated. The loans have to be repaid, even if the consquences are dire. So it's high rates and tight credit to get back to a sound economy.

R Lindsey, Chesterfield, UK

If we don't kick our debt habit, we face the spectre of future generations inheriting debt, not capital. Should we not urgently consider whether our endless consumption, and ever increasing material expectations, actually needs to be checked, not further fuelled by debt?

Andy, Bath,

It is wrong to crucify savers just so that the never-never brigade can continue binging on the cheap. They are mostly buying goods from the Far East anyway. More jobs in Argos is not the answer. We make much less, so we create less wealth, so we have to spend less. It is hardly rocket science!!!

Andy, Bath,

Cutting interest rates to the bone would weaken the pound even further, would drive inflation sharply upwards, and would stifle exports. As has been said, Japan tried this tactic in the 1990s in a very similar kind of recession and found that it failed utterly.

John, Trieste, Italy

True but I am flabbergasted you should say Brown was the first to recognize the need for an unprecedented response. Many of us, including you yourself nearly a year ago, were warning it was important to be ahead of the curve when the banking crisis first broke. We were told 'Britain is best-placed'!

Robert Cookson, Milton Keynes, UK

That's right, cut interest rates and starve the pensioners who live on their savings.

Jane Dinham, Norwich,

F'irst, an apology for being so wrong over the past six months would be in order. Second, devaluation and spending one's way out of trouble are the old Barber tricks, a revamp of his 'Dash for Growth'. Didn't work did it. Oh, yes I know, it's different this time around.

John Walter, bonn, germany

As long as Brown is in charge, there will be chaos. The state we are is in is proof of that. Anyone who thinks he knows what he is doing needs their heads checking.

Jeremy Poynton, Frome, United Kingdom

Anatole, I am afraid your repeated calls for drastically lower rates are falling on deaf ears. The markets don't belive rates will fall below 3%, and worryingly I think they are right.

Fingers crossed The Bank wake up and smell what is about to hit the fan...

James Trouble, Chemlsford, Essex

At 1% interest, borrowers are being given money, robbing depositors (e.g. the elderly on fixed incomes). If lending criterial are stringent, then only those with equity will borrow and they may not be numerous enough to reinflate the economy. If stringency is lowered, we start the next boom.

tom legassick, dunedin, new zealand

Sure, let's run the printing presses; only now the world is wise to that tactic. Any inflation of the money supply quickly gets noticed and funds get shifted. The real losers in this are wage earners on fixed incomes.... with high unemployment hindering their alternatives.

Jon E, Atlanta, US

Just how much rope to you think this dog has left as it races around in ever decreasing circles. Consumers simply can't keep taking on more debt. Cheaper credit spurs them on but as soon as you return rates to neutral they start to fall over. Either assets get cheaper or you become more productive.

Stephen Hargreaves, Hobart , Australia

Since the Bank's interest rates are already disconnected from the official BoE rate, what makes you think the the Banks will pass on further cuts in interest rates. 50% of retail bank deposits are controlled by 4% of depositors. Are they going to leave their deposits in banks paying 1%? I doubt it.

Alexander Charles, Wells, UK

Is there any reason why the difference between the mark to market figure and the maturity figure should not be shown in company accounts as a contingent liability? Why should shareholders be the last to know?

roger sykes, christchurch,

Japan tried getting out of recession by lowering interest rates to zero and that is still is not working. The issue is excess bad debt in the market. First step must be to stop insane government expenditure on non-wealth generating Olympics, health service and fat civil service.

Ron, Oxon,

The Chancellor is planning a huge capital expenditure programme. Already the Government has effectively promised £500bn for bailing out banks. All the money is going to be borrowed and this will raise both the inflation and or interest rate.

Does it bear thinking about 1970s all over again?

S Yogarajah, Harrow, UK

You are right about the need for interest rate cuts as Vince Cable suggested at the last Prime Minister's Question Time.

Recently Cable wrote to Alistair Darling requesting a 2% cut by the MPC. That was ignored and the MPC cut by only 0.5%. As that was insufficient markets crashed the next day.

Bertram C. Johnston, Overijse, Belgium

Surely less tax would be better as the nuts and bolts of the economy (the people who buy stuff) will have more money to spend, rather than banks hoarding with capped floors for variable rate mortgages etc. Such a one sided view. But we all accept we have to tighten our belts. Efficiency will survive

Alistair Kipling, Birmingham,