Chinese goods prices up,
oil and gas prices up,
food prices up....

Result: Less disposable income to service that insanely large, 6x income mortgage on that crappy, overpriced house...Repossessions and house price crash

Government response: Lower BoE rates.
Result: Even more inflation, UK economy stuffed

Thanks Gordon Brown!

K Jirackova, Newcastle, Tyne and Wear

I just hope not all Americans are not as paranoid as you, Paul E Bahre.

justin, London,

For many years stupid politicians keep saying 'free trade is the best future for all'. They were hoping that Asia, Africa and South America will just keep buying their overpriced goods and continue to sell underpriced raw materials.
At the same time they were busy killing their own production, inventing sub-prime financial schemes and ridiculously overvaluing new technologies and internet companies.
That is how 'growth in economy' and 'brilliant years' are being created even today.
We have 'hot air economy' which is based on pushing papers, inventing schemes and producing real goods less and less every day.
We have nothing to export and now it is China's fault that import will cost us more. At the same time we insist that China should pay workers better.
Retailers which are asking for lower rate should first reduce their retail prices. They are buying men's cotton shirts at £2 in China and they load price with their operational costs £10-14 asking customers to pay £24+

Savo, London, UK

Tim Wilson, like the fairy god mother analogy !
It seems to me that the economists and business leaders in this country do not know what they are doing.
All of these things, as well as the house price discussions, inflation discussions - seem so obvious.
OF COURSE prices cannot keep falling forever !
OF COURSE house prices cannot continue to rise at multiples of peoples income forever.
OF COURSE people cannot get further and further in debt - they will have to pay it back at some time.
OF COURSE with increasing costs, fuel, food etc inflation will increase - no matter what the CPI states.
Never mind about the credit crunch, none of the things we are seeing now should come as a suprise !
Are the business leaders, economists and reporters really so stupid as to not see any of this coming ?

Loop, Matlock, Derbys

In response to Paul E. Bahre, Granby, USA, CT

I think that America is better placed than the UK to deal with the economic threat from China (and India). And I must agree that the military threat from China is of greater importance.

I don't really think that there are any bad intentions from the Chinese, they simply want what everybody else wants - to rule the world.

Whether there is a conspiracy is anybody's guess. However reading books from the US written by people like Donald Trump, American and European businesses will have to be prepared to protect their businesses/manufacturing from concerted assaults.

Gordon Brown likes to talk about free trade but that may be already be yesterday's news. A level of protectionism may be needed to protect the integrity of the US economy, the world's best chance for freedom and liberty.

As we know, Arab, Chinese and Indian businessmen are more concerned with aquiring assets/business/materials than dollars and pounds. Dangerous.

joe, Berwickshire, Scotland

Imported Chinese inflation is not a possibility - it is a fact. I own a small business which sources exclusively from China and pays in US dollars. In the past six months, freight costs have risen by over 30%, and factory prices are rising by 10-20%. The low dollar has mitigated some of this, but if UK interest rates fall, you can say goodbye to any support there. Get ready for 5%+ inflation in the UK.

Roger, Esher, UK

Paul, I don't think your second half is strictly true. The Chinese empire does have a large problem with the Muslims of their western dominions and I also suspect they're less interested in spreading communism than enriching a corrupt, though very sizeable, elite.
When we consider the so called rise of India and China I wonder if it is really true to say these counties are capable of super-power status when their success (in the case of China) is built upon the virtual enslavement of most of their population and massive social inequality.

Jim, Edinburgh , UK

There are plenty of locations in the world for cheap production if China cannot keep control. Central America, parts of SE Asia, Romania, Ghana... there are plenty of economies that are positioned to do work at a low price.

Rob D, Bracknell, UK

For years we have lived off the deflationary impact of imported goods balancing double digit increase in prices within the Uk economy( including council tax for example )
This is now changing as the cost of inputs oil and commodities is increasing.
We allowed a boom in house prices by failing to establish an inflation/interest rate control mechanism which included house prices . This boom threatens to destabilise the entire economy.
I am frankly amazed that the Times at every opportunity calls for a cut in interest rates when this strategy was responsible for the house price boom in the first place.
I am afraid that we allowed a bubble to inflate(house price rises are inflationary) which has to deflate.
The strategy of reducing interest rates to solve the problem will only spread the problem to the wider economy, through a collapsing pound and more general inflation.

James, NI, UK

Okay I can handle the fairy godmother,but a poof and flashing as well in the same sentance,I think we need lower interest rates fast

Michael, truro, uk