No, Edward is not spot on.
"there is a huge number of reckless individuals who have over borrowed, some having lied to do so".
Actually, it is the banks and the mortgage lenders that have overlent, and in some cases even helped them ( the "reckless borrower" ) to falsify their income to obtain their loan. In a rising property market the banks could take a share in the profit-taking, so happily turned a blind eye. At the same time banks and other lenders bombarded the consumer with offers of loans for "houses in the sun", lending money to individuals (including foreign investors) who owned multiple UK properties in the full knowledge of what was going on.
In a deregulated market with no restrictions they were given a free reign to create this inflationary spiral. It is now for the ordinary joe in the street, driven to purchase through fear of increasing property prices ( as before the last UK property crash ) to slave for decades to pay for all their profit-taking.

Roman, London, England

I have never seen anything like this. The media the government and the very people themselves are brainwashing themselves to a disaster. Go on. Make the problem worse. Stop lending money to people. let them default on their mortgages and reposess their homes. sell their homes cheaply and let the market collapse. Feed them with stories of gloom and disaster. let the them eat cake. Those who go under go under. those who stay afloat stay afloat. and when the cycle ends, lets wait for the next one

michael, London, uk

this is not about greed but fear.

the US banks loaned money to uncreditworthy borrowers. when they unsurprisingly could not pay the banks started to go south. this meant that other banks who loaned to these banks effectively lost a lot of money which they could not pass on in loans to yet other banks.

the result was a fall in the availability of money for banks to borrow from each other. and when something is in scarce supply its price rises. in this case that means the interest rate.

the BOE cannot force people to lend money at less than the market rate because the banks would simply not do so and take their money abroad and loan it there where it would earn more.

I dont even know what Paul means, its a credit crunch not a consumer crunch.

if there is a primary cause to this its the iraq war. petrol prices put pressure on energy costs which have effected employment in the US. this is what triggered the defaults in the US and elswhere and started the global credit crunch

M FW, Porthmadog,

Why doesnt the BOE simply make it a condition of their loans that they lend it to customers at a fixed rate above that which they tendered for it.In this way the cash lent to the banks will target the borrowers and not the balance sheets of the Banks.

adrian simm, bridgetown, barbados

One word that sums up the whole situation in the world today"GREED" everyone of us...

Mike B, Lincoln, uk

The 'consumer crunch' is BECAUSE of the base rate cut devaluing the pound, meaning we all have less disposable income.

Paul, Coventry,

The BOE is understandably currently being swayed by media pressure in making each of its monthly decisions. As a result Mervyn King and his committee are not giving enough weight to inflationary pressures in the UK economy. We all want our house prices to remain at current values but not at the expense of rampant inflation especially when wage rises are linked to the CPI inflation figure.

john, milton keynes,

The banks got greedy and are now hurting which means we are too, the banks are calling the shots either way, which leads me to wonder why we allow them to be run by capitalists often striving for short term profits when theyre greed will inevitably cost the economy and potentially cripple it, why not nationalise the banking system or at least regulate it in such a way that the banks success or failure is its own problem and not that of the government.

Mark, Birmingham,

When BoE raises or lowers interest rates, it should make it mandatory on all banks and lenders to abide by that action with their customers. They should shoulder the risk of gain or loss on their investing in the mortgage arena, and not cushion their loss by increasing charges on the borrowers, otherwise what was the purpose of the BoE action ? Catch 22

Paul, Las Vegas,

An idea that Paul from Chicago USA gave me.
If the banks do not follow the reduction in the interest rate, block repayments, causing a cash flow problem to the offending lender, forcing them to take action to reduce rates.

Paul, Las Vegas,

It is not necessarily the case that lenders have found lending at low interest rates unprofitable, as I'm sure their profits in retail banking will show. However, due to the wholesale money market being so expensive, they simply can no longer afford to offer those low interest rates as they previously were. LIBOR is around the 6% rate at the moment which does not bode well for borrowers, either banks from banks or consumers from banks.

Neil, London,

Edward, London is spot on. However, the pricing of risk was totally miscalculated. Interest rates for a lot of the debt junkies were woefully too low allowing some of the most stupid people in the country to amass huge debts. Meanwhile the govement turns a blind eye as all the extra paper money goes to increasing their coffers to spend and waste even more money.

The losers will always be the middle income people who generate real wealth for the country. Only is you're involved in doing things that bring in money into the country are you helping the wealth of the country! We need to drive out excess public spending so the country can complete in the global market to generate wealth for the country.

WE CANNOT RELY ON PEOPLE BORROWING PAPER MONEY TO SPEND INDEFINITELY TO KEEP THE ECONOMY AFLOAT!

Peter, Swindon, UK

Banks extending credit well beyond what people could really afford has been a major contributor to raising house prices, after all you can only pay what you can pay. It was allways unsustainable, house prices can't go up for ever at the rate they were, completely disconnected with peoples salaries and any logical definition of "affordable".

Last 5 months rates have come down by 0.75% - my variable mortgage hasn't come down at all, it went up fast enough when rates were going the other way. Its also clear now that the Bank of England playing with interests makes no difference at all. The market is certainly global and the controlling factors now seems to be much less easily controlled parameters, like confidence!

W Gray, Baldock, UK

Paul from Camberly has hit the nail on the head here I think. Also consider that the lending banks don't borrow from the BOE at BOE rates, they borrow from other institutions. If the cost of money is increasing for them (Libor), they have little choice but to pass on those rises to customers, regardless of what the BOE decides to do.

The exception (I hope) to this are people like me, who borrowed on lifetime BOE rate trackers. I changed my mortgage from a fixed rate to tracker just before this whole debacle broke. Given that many of the influences driving up inflation are external, I don't expect BOE base rates to have any effect on it in the short to medium term.

IANAE (I am not an economist).

Robinson, Cambridge, Cambridgeshire

How many more indicators do we need? Mortgage and consumer finance rates up, taxes up, CPI/RPI and real cost of living up, transport costs up, utility bills up; savings rates down, pound down, high street spending forecasts down, housing equity down; (add to these - GBP200m taxpayers' money given away on US TV glam show; post office assets rifled, Northern Rock nationalization, etc., etc.) I think we can safely say we now have a full-on credit squeeze arising from fiscal incompetence.

However, credit where credit due - we can single out just one person responsible for our past and present fiscal policies: Mr Brown.

His one laudible action was to abrogate political control of BoE base rate policy from... himself.

Mike L, Chippenham, Wilts

Okay, economics is not my strong point but why doesn't the government stop playing with interest rates in order to keep inflation down and therefore pay deals and instead ,given they have ladened the tax payer with a record tax burden and are currently enjoying huge returns on fuel tax give us a large tax cut?

I know you will probably say it is that they have not got any money but have you seen the salaries on the NHS website? They have lots of jobs in the £40-£64k section plus a lot in the £64k+ section. I find it offensive to see salaries like that when my county's average is £17k and it is being wasted in such a manner.

There rant over, well apart from why in other jobs do you have to have relevant qualifications and as chancellor you do not?

RT, Lincolnshire, UK

Brenda from Sheffield. Please don't think only yours was the perfect, virtuous generation. I am 29 years old and have been saving for a deposit for the last eight years. I now have a 20% deposit and am lucky enough to have snared a first direct mortgage with a decent rate. A week or two later and I would have been rejected, and given the current situation would be lucky to find a mortgage at all. I don't have the luxuries you wrote off, nor do my friends who are also saving and paying off student loans. Sometimes the tone of comments in these pages suggest feckless first time buyers at are fault for the lack of mortgages and high rates. I don't know what people base their truths on but I don't know anyone serious about buying a house who isn't sacrificing a great deal to save at the moment.

Keely, Southampton,

Last August A Darling stated that no UK bank was involed in the credit crunch.Was he correct?

Stephen Hulton, eure, france

Well Done RB.
You speak the truth, the whole truth and nothing but the truth. Lets all help the banks, to hell with having nothing to eat, nothing to live in, no clothes to wear, as long as the banks are ok, thats alright then.

J. Hinchliffe, Lincoln, Lincs

This is no temporary blip. We have pressures of supply and demand of essential commodities that for the first time in our lifetimes cannot be met by just 'providing' more. World oil supplies have peaked, although no commentator dare mention this; ditto food, the green revolution is over and we have bred up to maintain population levels at new, unsustainable, demand levels. And suddenly vast world populations are attempting to live like the relatively few westerners who have traditionally cleaved the lion's share of world production to themselves.

The party is nearly over and the world is entering a manic game of musical chairs, where everyone will fight like fury to sit on the last seat and destroy everything in the process..

Colin Smith, Norfolk, UK

Every time the BoE cuts the base rate, Sterling falls and we all become poorer. Perhaps some more responsible journalism in the mainstream media would stop so-called 'analysts' and 'experts' hyping up talk of rate cuts.

Paul, Coventry,

"Profiteering" Nick? It's called banking. If people cannot afford to pay back a morgage at 5-6% it's because they got into too much debt. I know people with no children and 3-bathrooms.

Frederick, London, UK

If the banks fail, they will lose your money too! The government should move to explicitly guarantee deposits before the banking system collapses. And, of course the banks are trying to make profits. That is their raison d'etre.

Richard, London,

Anybody who thought otherwise was stupid to the point of imbecility. And not because the banks are profiteering, simply money market conditions.

Alex Ritchie, Salisbury, UK

To Edward of London - Your argument could almost be seen as credible in a round about way, if the banks do not drop the interest rates on deposits accordingly....Deposit rates down & mortgage rates up = profiteering in most languages!

lloyd, UK,

Bruce, Nick, a simple answer, buy bank shares. Good income and potentially big capital gains.

Ian, Chester,

Nick,I have enjoyed FREE banking for years is that profiteering??????

brian, sutton coldfield, UK

Edward must be a banker.

The previous rate cut was not passed on on variable rates - I wonder how many banks will do the same this time round. I can perhaps understand fixed rates going up. However, one would be forgiven for thinking that the banks are acting as quasi cartels. They WILL maintain their profits one way or another - lets face it, they have been responsible for reckless lending.

AN, Birmingham, UK

This occurence is not that surprising. The BOE can set short term rates ,but have no control over the long term rates which govern what level fixed term rates will be set at. In effect these rates are now reflecting the simple fact that bond markets are confidently suggesting that todays bank action on rates will lead to higher future inflation and therefore higher interest rates. Nothing to do with profiteering although as usual we have the expected crowd of bank haters out shouting about it.

SC, Preston,

Edward,
The banks chose to lend to these poor cedit risks to make more profit. They are now increasing their profit margins by increase their "mortgage interest rates" at a time when the base rate is coming down. That is both profiteering and operating a "cartel" as they are all acting in unison.

imj, Reading, Berks

Inflation is rising, so basic economics suggests that interest rates should rise.

If interest rates rise then the credit crunch may cause more runs on the banks.

Have central banks (BoE etc.) and commercial banks done a deal whereby central banks lower interest rates to help the banks, but the commercial banks feebly tackle inflation, by raising interest rates to the consumer?

The winners - the banks and their cronies and investors
The losers - the "consumers" or "workers"

Mark, Manchester,

Offer a banker/building society manager a chance to gouge a customer and expect him to refrain? You'd have a better chance inviting a tiger to refuse prime steak.

The medicine is wrong. Why else have the many cuts in bank rate not reduced mortgage costs? We're trying to get out of a hole by digging it deeper.

What we have to do is relax the credit market AND THEREBY move the balance between mortagee and mortagor, between credit demand and credit availabilty, towards lower interest rates. Bank Rate does not affect this, not directly or quickly.

Sacking the Chancellor would help too . . .

Noel Falconer MEcon, Couiza, France

Scrap buy to let option and give the new working class generation a chance Mr Brown.

sergio, Eastbourne, Sussex

New Labour have destroyed the hope of home ownership for many young people by allowing 2nd home ownership for the selfish buy to let brigade. No wonder thousands leave these shores for a better life every week. But hey, it's not all bad. At least we're not being overun by immigrants, have a great health service, and the best schools in the world. Oh and don't forget how little tax we all pay too!

Neil, Birmingham, U.K

Cutting the rate was stupid but the banks are NOT rising rates for the good of the economy. Get real! They are rising rates in order to squeezze more money from their clients. It's squeezzing time and they WILL abuse their position as much as they can. This decision to increase base rates smells «cartel». Beware of Nellie Kroes!

An increase in base rates will further increase the banks write-downs which is actually counter-productive.

Rui, Lisbon,

the real story of this credit crunch started when brown started at the exchequer. it was a policy designed to bolster popularity for govt by limiting building by bringing planning restrictions in and forcing house prices up. at the time planning took about 18months in london. now its 10 yrs plus. the resuld house prices increased, people felt wealthy and took out ever larger loans.
lending policy at the time based on lending against savings could not cope so brown allowed the banks to sell mortgage books in order to allow more borrowings into the system to keep the effect going. it worked for 10 long years.. Now its the time to pay the price, but if you want to know the real source of the misery to come.. them look no further than brown. he and blair bought your votes for 2 elections this way.
im lucky. i sold up and quit UK 2 years ago

Dave Chambers, Quezon city, Philippines

It is a mistake for the Monetary Policy Committee to be cutting rates: in the long term, inflation is a more serious destabilising influence than a slowing housing market, which is already catastrophically overinflated in any event. Since reducing rates by any prudent increment has very little effect at assuaging the financing difficulties and the housing market, the Committee can achieve more good by addressing inflation instead.

James E. Petts, Burnham, England

Dear Kevin....don't blame Steve...you don't know he wears cosmetics! Many of those developing countries are so utterly corrupt that the majority of donations don't get anywhere near the people who need them.

Not to belittle your comments but there are indeed millions of UK families who struggle to feed their families properly, and old folk who have to sit out cold hard winters with inadequate food and shelter..... so we cannot even get our domestic situation right.

Of course Banks are out to make money and as London is the financial capitol of the world...we in the UK shouldn't complain too loudly as this does ultimately lead to investment being drawn towards the UK.

Jonners is more accurate in saying we have to refine the instruments we use to balance inflation - v - spending. The Bank of England does not seem to be coming up with the ideas...these monthly interest cut meetings must be quite a chore!

Sue Mc, Surrey,

Saint Brenda - has it ever occured to you that in the 70's the average house didn't cost more then 8 or 9 times your salary. People obviously worked shorter hours as in order for me to work around my husband I would have to do a night shift starting at 10pm and be back home by 6.30am.
You are totally out of touch with the real world.

JH, London,

Cheap easy money is to blame for all this, i.e Greenspan!
Maybe now we can get back to sensible house prices and less personal debt.
I'm sure the government would prefer us all to be debt slaves all our lives to keep us working ourselves into the grave to prop up the economy. Well sod the economy, lets get back to basics.

steven pill, bedale,

A .25 cut saves £31.25 a month on a £150k loan not £22
Nationwides increase of .32 points would cost an extra £40 pm not £150

Ian, Stanmore, UK

I read that in the UK the amount of savings exceeded the amount on mortgage.
One thing that shows the banks are profiteering is their reduction of savings rate because if the libor rate is 6% plus then why don't banks offer near that level for their savers rates and have the mortgage debt covered by savings.

Clare, sheffield, uk

the real story of this credit crunch started when brown started at the exchequer. it was a policy designed to bolster popularity for govt by limiting building by bringing planning restrictions in and forcing house prices up. at the time planning took about 18months in london. now its 10 yrs plus. the resuld house prices increased, people felt wealthy and took out ever larger loans.
lending policy at the time based on lending against savings could not cope so brown allowed the banks to sell mortgage books in order to allow more borrowings into the system to keep the effect going. it worked for 10 long years.. Now its the time to pay the price, but if you want to know the real source of the misery to come.. them look no further than brown. he and blair bought your votes for 2 elections this way.
im lucky. i sold up and quit UK 2 years ago

Dave Chambers, Quezon city, Philippines

I agree with Andres, lenders funding costs are not linked to the base rate, they usually obtain financing from wholesale money markets, and this is based on LIBOR. LIBOR is currently close to 6% for 3 months, which means banks can not afford to bring rates down.

The reason LIBOR is so high is that banks are not willing to lend to each other. Why? Firstly because the availability of credit has dried up, and secondly because there is no trust between banks - no one knows what dodgey off balance-sheet investments are looming in the background (eg. Bear Stearns, Northen Rock), thus are pricing in high risk premiums to protect themselves.

A drop in BoE rate alone is not going to help. Liquidity needs to be injected into the economy at the same time before things are going to get better.

Unfortunately in the meantime us homeowners are in for a rocky ride until the market settles - whenever that may be!

Katie, London, UK

The banks are following the building societies lead, which is more sensible. The government is encouraging profligate spending by cutting the rate, which will increase the incidence of bankrupts. The economically sensible thing to do is to harden the rate slightly, reduce the tax burden on the general public, and follow policies that are well thought out instead of pandering to knee jerk reactions to pacify those who shout loudest. I am generally apolitical, but I can count.

alan, benalmadena, spain

The banks have to change their variable rate mortgages in line with the Bank of England lending interest rates and also the saving rates will change, fixed rates and discounted does not need not change but then again i am sure the banks will do a good job of screwing up the economy with their greedy attitude and the media will help in their scaremongering tactics!!

mike hunt , crooydon, uk

The accurate answer is that both Nick and Edward are correct. The banks are making lending more expensive and saving less profitable. The effect of this is that it takes some of their risk (bankruptcy of borrowers) off the table as it is too expensive for the high risk borrowers to sign. In addition to this the borrowers who do continue, pay a higher premium (profits for the bank), in order to cover the increased number of people who do default.

Banks are covering themselves as any other company would do but the knock on effect both personally and to the economy in general is a painful one and likely to continue into the year. My suggestion? Reign in your spending people and get saving, that big flat screen TV and all inclusive holiday may have to wait!

Alex, London, UK

This article is misleading, in that it doesn't make sufficiently clear that the increase in fixed rates is for new mortgage deals, not existing ones - people already on a fixed rate deal with these banks will not see increases by definition, since they're on fixed rates!

RW, UK,

Yippee!

More knee-jerk liberal blah-blah about the profiteering of banks!

Yes, let's rewrite economic policy so banks are not allowed to make any money, then they'll all stop paying £800,000 per hour into the exchequer, then all the precious social services you communists love so much will dry up and maybe you will actually take responsibility for your lives instead of making babies to score a council flat.

Leaf-eating sandalistas... listen up: banks are the cornerstone of the UK economy. We have little manufacturing, and even less primary industry; without our role as a key player in the world financial scene we are up the river.

Deregulate the banks completely and let the open market dictate their rates. I guarantee the irresponsible borrowers will be turned off by the idea of a mortgage @ 15% p.a..

Peter K, London, UK

The half-wits at the MPC/ BoE have ruined the pound and fuelled inflation and made saving less worthwhile....what will they do for their next trick?

Robert D, Cricklewood,

When will the government wake up and admit that the UK is skint ?

Peter Fordham, Pego, Spain

The BoE rate-cutting is a bad idea. The aim of monetary policy should be to control inflation and steady the currency (are you reading this, Mr. Darling? Mr. King?) If people who took out 100%+ mortgages go to the wall then so be it; it's their own fault for being careless in the first place.

This was a classic case of the nanny state intervening in the wrong place at the wrong time, and the affected industry saying, "No thanks, we think that's rubbish."

The leaders at Nationwide, RBS, Alliance & Leicester, and Britannia Building Society have their heads screwed on straight. Now we just need the FSA to butt out and let the banks get on with doing the 2 things they do best: making money, and being the foundation of the entire UK economy.

Peter K, London, UK

Edward it's you who's wrong and needs to get in the real world.

The banks have only one goal in life and that's to make money. If they can't do it selling more mortgages then they'll happily screw their exiting customers. They have NO morals and don't care if families lose their homes. After all shareholders want their payouts!!

Don't forget it was the banks that irrisponsibly sold the mortagages in the first place. Surly it's time banks had a duty of care to their customers just as many other industries do?

Mark Sheppard, Retford, UK

When we took out a mortgage in the 70's, we had saved up10% deposit and the money for solicitors fees etc. Not easy on the low salaries then. We did not then fill the house with everything we would like, but saved for things we needed. And in our time interest rates went up to 15% plus an exrtra half percent for those with endowment policies. We did not have 2 cars,nor plasma screen TV. We managedespecially when i gave up work to have a baby. Then I scouted round for p/t jobs that did not interfere with me being a mum, and Dad could look after his own son whilst I did this.
I will agree student loans were not invented then and should be scrapped for all medical/dentistry/vetinary students, and PROPER UNIVERSITY degees. ANd bring back MIRAS. All us workers are paying for idlers on the dole and unmarried mothers with council houses. This must stop.

Brenda Callaghan, Sheffield, England

Have daily express readers invaded the 'have your say' section?

First of, the BoE doesn't use public money, it simply prints more money, this is call inflation (the increase in the money supply). Northern rock was bailed out by the govenment in the end, NR debts have been added to the national debt, do not confuse this with the BoE injecting 10billion of short term loans into the industry.

Also, the banks are not profiteering, they're trying to get risky loans off their books, if you knew lots of your customers could stop paying, leaving you with debts, wouldn't you try and get rid of the customer?

UK plc is in for a bumpy ride, the pound is falling (increased import prices), no-one wants to lend credit, cheap credit has ended. All the things that made us feel rich are quickly disappearing!

Paul, Camberley,

It all seems to be about helping the people with mortgages who probably overborowed in the first place. What about the pensioners who saved during their lifetime and now face a drop in their incomes as interest rates on their savings fall. Many of us rely on such income to supplement the state pension.

Senior Citizen, Preston, UK

Dear Steve Tea. By the time you go to bed tonight 30000 children in the world under the age of 5 will have died, most from preventable diseases.

In contrast last year, UK citizens spent over £4 billion on cosmetics. Perhaps if we individually got our priorities and responsibilites right Gordon Brown wouldn't be giving away a mere £200million.

Kevin Thompson, Reading, UK

Well - I'm boned.
In some ways I'm lucky as I've a year to go on my fixed rate - but childcare has gone up ten percent, car fuel up 27% since Gordy got the keys to number ten and heating, lighting and food all in double digits.
I agree with Paul in Chicago - we're in a perfect storm. Should have sold my house a year ago and sat in a rented place for a couple of years. I could probably have upsized for peanuts.
The only good news is that when theres so many reposessions that the banks are loosing out hand over fist they will bring rates down - but thats looking a long way off.

James, Glasgow,

When are these chaps going to get the clear and obvious message that price controls don't work. Cutting interest rates to zero will not make a difference because lending at lower rates has become unprofitable for the lenders, just as the control of wheat prices by Roman emperors led to hoarding by farmers and a 'wheat crunch' in the Roman empire. Those who fail to learn from the lessons of history are destined to relearn them.

anthony, london, england

Predictable headlines lead to predictable responses, as these comments show once again. The BoE has lowered their rate, but banks don't borrow most of their money at this rate - instead they borrow in the market at rates based on LIBOR (London Interbank Offered Rate). In the good old days LIBOR would track the BoE rate closely, but with liquidity disappearing from the market the LIBOR rates have been going up even as BoE rates came down - the spread between the two has increased. Banks are more wary of other lending to other banks post Northern Rock.
Banks are borrowing more expensively and they are passing this on to customers. The exception is HSBC, which is seen as a safe haven by other banks and can borrow more cheaply than others. And guess what - HSBC is offering the best mortgage deals in the market right now.
House prices are coming down, more people wil default on mortgages in the coming years. Banks will take big losses from overextended borrowers in the coming years.

Andries, Gerrards Cross, Bucks

The use of interest rate adjustments is a very blunt instrument to control inflation. There needs to be some intelligence and innovation brought to the controls of our economy.

Jonners, Norwich, Great Britain

"There's a simple explanation for the mortgage companies' behaviour - one word: PROFITEERING.

Nick, Rotherham, UK"

No Nick, it's called covering themselves and try to stop the UK debt junkie from borrowing more by making it expensive. They are reducing their risk exposure because they know there is a huge number of reckless individuals who have over borrowed, some having lied to do so, and are now about to be bankrupt. Do not try to lay all the blame with the banks. There has to be personal responsibility from the profligate UK public and government.

Edward, London,

The Banks ignore the rate cuts and increase the rates to borrowers but at the same time they reduce the rates for savers, so the Banks always win and the consumer always loses.

Bruce Parry, Mishref, Kuwait

There's a simple explanation for the mortgage companies' behaviour - one word: PROFITEERING.

Nick, Rotherham, UK

Why is the BoE using tax payers' money to bail out banks that got themselves into trouble in the first place?... For those banks to then use our money to then line their own pockets?...And then keep raising mortgage interest rates to take even more money from us?!? What is the govt/FSA doing to protect us? Next year we'll read reports of how banks have "amazingly" turned round their fortunes as they will report 'sky-high' profits, thereby earning their directors a big fat bonus! Banks should be forced to pass on the interest rate cuts to customers as part of the deal for receiving billions in tax payers' money.

RB, London,

The UK and global economy is poised for a massive downward trend. The current credit squeeze dynamics are brewing into a 'perfect storm.' At this stage, it is unclear what will be the economic stimulus to bring us out of the decline. Home owners should sit tight and banks should realise that their efforts are self defeating - as they squeeze lending, house prises continue to fall - leaving the banks even more exposed to bad debt - a perfect storm....

Paul, chicago, USA

Millions are families are hit by higher taxes from a wasteful Labour government and now we have Brown pledging to spend a further 200 million pound on Africa. WHAT EVER HAPPENED TO PUTTING UK first?

steve tea, manchester, cheshire