The real tipping point is weakness in the jobs market. If the jobs market weakens banks could panic and trigger mass foreclosure on mortgages in an attempt to maintain liquidity. Another possible trigger could be a falling pound.

There are three ways of dealing with debt; repay, default or erode. It seems that the UK is going to experience a mixture of all three.

There simply isn't enough credit, the worrying thing is that there won't be enough credit for a year or maybe more. It is looking more than likely that the government will have to deal with the credit over-hang by taking mortgage debt as collateral on a mass scale.

I seem to remember New Labour saying that they have ended the boom and bust cycle. I seem to remember someone else saying New Labour, new danger!

Costas, Cyprus,

What amuses me most is the assumption that an economy will carry on happily while a credit crunch is going on. This is the fallacious belief of the vested interests in continuing high house prices.

David, Guildford,

Banks are here to make money not lend money on depreciating assets. They are busy investing in the next global 'Bubble'; the rising Chinese economy.

john, milton keynes,

Perhaps you didn't notice the financial turmoil last summer? The run on Northern Rock? Or that various house price indices (which measure prices at different points in the buying process) show peaks from July 07 (primelocation) through August (Halifax) to October (Nationwide and Rightmove). This story is a bit behind the times.

Mark, Woking,

Bye bye Pound! it was nice having met you.
I am going home, back to the safety of the Zloty

Igor, Richmond,

I am not sure that the 'credit crunch' constitutes 'higly unusual conditions'. It is not some freak incident outwith the control of man. Nor is it simply a US problem, that the UK has imported. The recent boom (housing etc) was fuelled by unsubstaibale levels of lending, both in terms of amount of lending and cost of lending. Banks and borrowers got greedy and banks massivley mispriced risk. The current credit crunch now is simply the flip side to the earlier excesses, with banks trying re-balance their business to the reality that us borrowers have run out of capacity to service our debts.

No more boom and bust Tony and Gordon said .

will, manchester, UK

This is the first time, after Bank of England's interest cut Building Societies increasing their mortgage interest rates. It is simply obstructing Govt's action to help ease credit crunch and so the inflation. Government should take action to curb it.

dipak das, camberley, surrey

Indeed Edward and while savers have suffered rate cuts, mortgagees have not benefitted from them. The banks and building societies have increased their profits at the expense of both.

Paul, Coventry,

Cuts in interest rates have no impact on asset prices during a credit crunch because the banks cannot afford to pass on the savings. As we have seen in the US, rates have been slashed dramatically whilst mortgage rates have risen.

Edward, London,