Expressions like "between a rock and a hard place" come to mind when looking at the economic crystal ball. We are in a strange age of consumer driven economies in which sentiment can drive the masses, like a herd, in any direction. That is why no one has had the guts to tell the truth about our economy for the past few years.
Since Labour came to power in 1997 consumers and the public sector have been encouraged to spend what we don't have, leaving UK PLC with record public and private debt and a balance of payments deficit running at £60 billion per anum. This illusion of wealth has kept the electors favourable to the Labour Party - no wonder Gordon Brown is now contemplating a snap election!

Steve Marchant, Torquay, Devon

Free market economy scamp.... Cant have it both ways.

NG, Amsterdam, nl

Far from any of this being the ex-Chancellors fault, the blame ought to laid at the door of US Fed Reserve . By boosting liquidity in the US after the dot-com buuble burst and the 9-11 attacks a vast wave of cash rushed into the system - hot money ALWAYS creates problems as it seeks to find a return - not only was such cheap money the driver for utterly useless mortgages in the US it was also the driver for the Hedge Funds to creat the demend that leads to the CDO/CLO market growing like topsy - Fed did point this out a few years back but did nothing about it - and here we are today suffering the effects. Dropping interestv rates now just means MANY problems in a few years time.

PD Brinklow, London, UK

Interest Rates are still at all time lows when you look at the long term values. Why as a country are we still struggling to spend? Too much cheap credit for too long has produced an economy that can only survive with low interest rates. I hope the Bank of England has the sense to raise rates now and fight off the inflationary pressures that we are now facing. It is time for everyone, from students to equity companies, to take a good look at our frivolous spending over the past decade and start acting more responsibly.

John, London, UK

Hopefully Mr Brown will call and win a snap election. He will then be in the position to suffer the full brunt of his lamentable handling of the economy.

His gross misconduct in allowing hous prices and lending to be the base and measure of the brittish economy could only result in the fourthcoming downturn, which as history dictates will not be averted or mitigated by the blunt instrument of interest rate adjustments.

Stephen , Portsmouth, England

Are politicians and the B of E completely stupid in the UK?
The last thing needed right now is a cut in interest rates,so as to ensure house prices keep rising!!
This culture of thinking that if there is a reduction in house prices it would be a calamity is just ridiculous.It is fed by those with a vested interest in seeing a continual price increase in houses.
Not unnaturally these vested interests are banks,estate agents, speculators and,of course,the government!
I recognise that there are other considerations other than housing,but housing is the main British "industry".

Nic, Royan, France

lower the base rate to stimulate the economy and remove tax from savings

Gill, M Keynes,

Correct me if I am wrong but surely lower interest rates would not affect the "bouyant" services sector as there is little capital investment needed in these industries.

Keeping interest rates high affects the struggling manufacturing and growing new S&M businesses much more (already hit by a 2% business rate hike in the last budget dont forget), but as this is no longer the "dominant" sector it can go and whistle!

Chris Sullivan, Macclesfield, UK

I agree that to cut rates can lead to a boost to the housing market and push inflation to a higher level, however the recent rate rises seem to have strengthened the London property market no end too.

Here prices have jumped In the past couple of years even with the costs of borrowing increasing. I think it has given the public a greater confidence that we are not heading for a collapse but more of a controlled slow down. So no panic selling.

As much as everyone seems to hate estate agents, they are not the ones causing the housing price rises. It is the queue of buyers and the lack of sellers and thus basic market economics. We have an increasing population and a lack of homes in the right areas.

What ever you do to the interest rates will not change peoples need for housing but it will affect their ability to afford a home and also their prospects for work and living standards. Debt is not a bad thing to have if you are responsible enough to handle it.

Tom H-B, Marylebone, London

Interest rates need to be higher to deter people from going further into debt. I believe that the calls from lowering interest rates comes from estate agents and the like who want to see extra mortgages being taken out and a subsequent rise in house prices.

hamad lone, Expat-Brit, Middle East

We've had a bubble (or indeed bubbles) developing for over 10 years. The last correction was due back in 2001, however, the attacks in America led to a slashing of interest rates - the result being another boost to the bubble(s).

Unless we want to stagnate for the next 10 years, we need to have a correction take place, even if it is painful in the short term, the alternative is much more painful and harmful to our medium and long term future.

Yes the Govt has played its part along with the Central banks and commercial banks. Apportioning blame will not alter the situation we are now in.

Expect a quick election as the longer Brown leaves it the lower his chances of re-election.

Zafar, Sheffield, England

Some of us have been saying for years that Chancellor Brown was following an imprudent policy of excessive Government spending and borrowing during a period of unrivalled economic growth. Now that the chickens are coming home to roost, there is no money left in the kitty to pump/prime the economy as it turns sour. Why has more not been made of this by political and business commentators (with some honourable exceptions) over the past few years?

Richard, Kidderminster, England

Excellent news.... Gordon Brown's handling of the economy exposing itself before an election..

Scamp, Aberdeenshire,

It's important not to cut rates without some mechanism of preventing another rise in house prices as mortgages flow more freely and to prevent private equity companies borrowing on the cheap to swallow up more companies but not contribute to real economic growth.

Scamp, Aberdeenshire,