Unfortunately inflation is far from dead. While the current pressing concern is DE-flation, you simply can't pump trillions of pounds into the financial system without it causing the price of goods and services to rise to match it. Inflation. It's out there and it's coming to a pocket near you.

Clive Russell, Coleraine,

Joe, Bristol ... YOU do not get economics at all.
If you do not produce , you cannot sell.
last Dec 10th the pound stood at €1.40. Today it is almost parity.
Please do not spout rubbish.
This government has destroyed the UK
We will now join the Euro.
Norway has not ... and where are they?

David Michael, London, UK

Join the Euro?
If we had joined Euro 2-3 years ago, somebody earning 30,000 sterling would have received 45,000 Euros.
If we wait until parity, which is what big businesses want, then 30,000 sterling will be 30,000 Euros!
And the Brits will be the poor people of Europe!

Peter, Cambridge, UK

In Switzerland there is a capital gains tax on sale proceeds of owner occupier (the vendor's gain - minus inflation and investment subsequent to purchase - is taxed). Surprise, surprise - no bubble in house prices. Of course one can still pocket a profit, but only after sharing it with the taxman.

Douglas, Arlesheim, Switzerland

Most people on here don't get economics at all. A weak pound is GOOD for manufacturers it makes their products cheaper abroad and more competitive. It's because the pound was devalued in 92 that we had a boom lasting 14 years. The enemy is inflation and that is under control.

Joe, Bristol, UK

Why on earth should an rise in house prices help the economy - surely people buying will have even less money to spend in the local economy
Ah yes, I do see. People are bluffed into feeling wealthier and therefore borrow more money that they don't have. No change then. God help the UK.

Gareth Jones, Dusseldorf, Germany

80% of the UK's economic growth over the last 10 years was based on house price inflation. People would take money out of their homes to finance purchases. What we are seeing is a natural correction which will bring stability back to the economy.

Mohammad, Glasgow,

Why no mention of the effect that Gordon Brown's policy of heavy borrowing is having on the exchange rate? You can't have it both ways - borrow huge sums from the capital markets and it will suppress the value of the Pound. His current policies will only drive Sterling lower.

Simon Booker, Surrey, UK

What exports?

James, Hull, United Kingdom

The falling pound may be more bad news for the country, but, since it is bad news and will effect people adversely, no doubt Labour will benefit in the polls.

hall, sheffield, UK

Thanks God for the pound being outside the Euro. if we had been in, interest rates would have been lower and the housing boom even greater. The bust now would be even worse. The depreciation of the pound will set inmotion the recovery. Always has, always will.

William, Guildford, UK

Why not join the euro - all the 'keep the pound' pundits can't answer when I ask why they aren't paid in groats and ducats !

ted pittman, Sidcup, kent uk

Gordon Brown wants it to flounder until the case for the Euro becomes too strong. He and his Nu-Labour cohorts always wanted the Euro but dare not alianate the voting public who, on the whole, abhore the idea. What better way to embrace an even higher cost of living than a Euro via the back door.

barry cashin, hertfordshire, england

David, During the summer months we export gas to the continent. Then they store it and in the winter we buy it back at a higher cost. The increased costs passed onto the customer comes from short term objectives by larger companies.

David, Manchester, UK

Hard to see an export boom, given we don't make anything any more.

richard, Croydon,

Too much focus on financial sector without control. If Govt. really wanted to show their ability it would be to encourage manufacturing again a dirty word under Maggie. Multiplier effect of Govt. spending also needs to get underway and fast. Low pound = exports/tourism up without Euro adoption

Derek Edgley, Ellon, UK

If we [UKPLC] earned it's money from manufacturing things and exporting them, then a weak pound might be a good idea - so long as it didn't stop manufacturers from doing all the things that make them really competitive that is. But we don't! Not joining the Euro is a political decision not economic.

Cirep G Nol, London,

matt, London - All of us are cupable? How did you work that out? We have a mortgage of less than 1/3 of the value of our house, money in the bank and make all of our payments every month. Savers haven't been culpable either, jst the government...and banks lending money on bad risks.

David Leslie, Perth, Scotland

Lets face it, whilst everyones houses prices were rising, we all went off and borrowed more money beause we felt wealthier. Everything today is purchased on credit unless you have so much money you dont know what to do with it. What the gov should do is cap borrowing to 3 x salary for everything.

Chris Roper, Bognor Regis, England

Perhaps we are a this mess beacsue we are bankrupt ?
We OWE 3.2 Trillion punds people. We are and have always been debt Slaves.
Fractional Reserve Banking System is the primary cause of this. For those of you who do not know how money is 'created' please google the above word.

zec zeci, LONDON , UK

Thank God our currency can fall against the euro, so that our exports can pick up. If we were in the eurozone, we'd be much worse off.

Jim Good, Hatfield, UK

I wish Neil from Maidstone was running the country. Then I'd get rewarded for saving instead of borrowing!

Ross, Lancaster, UK

How interesting to see such a cohort of times readers actually championing british euro membership!
However, this commentator is obliged to suggest that this is markedly short-sighted and reactionary in its nature.

Luke Harrison, Lancaster, UK

I agree Neil and those that deplore the idea are probably the irresponsible borrowers!!!!!

L, gwent, uk

As there are 7 times more savers than borrowers, perhaps we should put UP interest rates a few points to get money into this country and to get pound up too.

Let the housing market sink really low - that's the kind of adjustment this country really needs.

Phil, Preston,

Gwilym Ashworth - Your house is probably worth somehwere nearer it's actual worth...although I'd expect it to go down further yet. And so it should too - I can't afford to buy a house; I expect you're of the baby boomer generation that gave nothing and expects everything.

Jonny McKenzie, London, UK

Thank God someone else has some common sense, Neil from Maidstone is correct. Interest rates need to be higher. Would you want to lend out at 2% or 8%?.

If interest rates are cut even lower, we are not looking at a recession but a catastrophic Argentinian-style collapse.

Ben, England,

Our massive amount of imports will rise in cost stoking inflation to even higher than it is now but exports will be cheaper although we don't actually have much to export so that won't help. After a year of rising inflation and no interest cuts the government frightens us with 'deflation' as a cover

Mark, Romford, UK

"It is high time UK has given up its small-minded imperialistic mentality and gives up Pound for Euro. Jane K, London, UK"

On the contrary, the fact that the pound can move in response to fundamentals shows why we can never afford to be constrained in the totally politically motivated euro project.

Dave H, London, UK

Is there anything left for this government to do to weaken our position?

MaxC, London,

The reason why Germany doesn't have a housing crisis (and a less deep recession) is because banks have been lending responsibly, e.g. 3x income max.
British banks' unlimited, unchecked credit is what got us into this mess.
Still, Gordon wants lending to go back to 2007 levels!!! Somebody stop him.

Erwin, London, UK

Sterling is low because of GB's reckless borrrowing.He was warned 3 years ago by the OECD that he had a structural deficit of £30+billion and had to raise taxes or cut govmt spending. He did neither but increased spending and borrowing. Old dog,same trick. Prudence has fled.

Andy M, London,

Every labour government that has ever been in power (excluding blair) has presided over a currency crisis. Is this gordon's time?

Ed, London, UK

So what the pound has dropped, business get exporting. The glass is half full.

Ian, London, uk

you can guarantee gordon browns borrowing will send the pound down to record lows against the major currencys,and the end game will be for brown to put his master plan into motion and take britain into the european currency without a public vote.

thomas, wallasey, uk

Wouldn't it be a suprise if, having presided over possibly the worst fall ever in the value of the pound, Brown takes us into the Euro to "prevent any further fall" without the promised referendum. (If the let us in!)

I would have voted yes and we should have joined the euro a long time ag

David, Dereham, UK

People need to realise that this is not the sole fault of the Gov. We are all culpable for this mess, directly or indirectly.

Congrats to Gwilym Ashworth on realising that the value of assets can go down as well as up. Buy-to-let investors are more at fault over house prices than than the Gov!

matt, london, uk

Arghhhh I've just sold a bunch of euro fearing bad news from Europe. Reading over the weekend the pound is oversold and euroland is in some sort of suspended reality zone. AND my currency dealer agreed. Riots in Greece, Spain & Ireland basket cases, Germany can't export. What am I missing here?

Tom Taylor-Duxbury, Ludlow, UK

The pound has sunk below the Euro is mainly because we have just slashed interest rates so savers will be pulling their money out. Our ecomomy is more versatile than most in Europe especially those in the Mediteranian belt. We are a hardworking nation and will come out better by staying independent.

patrick, london,

With current interest rates half inflation rate, who on earth wants to hold pounds, except us poor suckers of savers who have been prudent all our lives, and are now having to bail out the financially incompetent.
I do not believe inflation will fall sharply it will be kept up by high import prices.

K Wells, Bognor Regis, England

Wonderful news I don't think! We now have the results of the country being encouraged by our government to live off the increase in equity in our houses....and the polls say that these people are the ones to rely on during the crisis...on what planet do the people who answer the polls live?

John Carreras, Birmingham,

So the markets see the UK economy as worse than other countries in the euro - further evidence of Browns incompetence

Bill, Knaresborough,

This is excellent news. The pound has been chronically overvalued and this will help the productive people of the UK. It is no reason to join the Euro, however.

Frank Upton, Solihull,

Time to make things and export them, and time to support businesses trying to do that. We are in a mess because everything has been geared to the financial sector and it has gone bust, and has no morals about the UK's health. Let's move on from here.

RobD, Bracknell, UK

Great news for us expats

I'm going back home for a two-week holiday to visit my parents and can't wait to spend a few less Euros.

Shopping has never been so cheap

Anthony, B'Kara, Malta

It is difficult to see a boom in exports when a falling currency will mean that feedstocks, and in particular oil ad gas, will rise heavily, and disproportionately to our competitors.
We had our own oil and gas in the previously, and that is running out.
Financial services are our main export!

David Martin, Bristol, UK

There are a number of reasons why any currency moves either up or down, ie Interest rate differences, then there is the unpredictable flavour of the month, With our government expected to try to raise huge amounts of cash another reason. and probably the main one for now, look for rate rises soon

rudd, Barking, UK

It is high time UK has given up its small-minded imperialistic mentality and gives up Pound for Euro. The reality is that Pound/UK is becoming less and less relevant.

Jane K, London, UK

Now the sheep will bleat - sign us up for the Euro. Do you think we have any power over money? If you do, why do you think that? Money is controlled by central banks - it's their means of controlling us. If the pound and euro are approaching parity it's because bankers wish it to. Consolidation.

Dan, London,

To join the euro would make a crisis out of a drama. When this recession fully hits Europe, the fall out is going to be immense and the euro will almost certainly perish in it.

Chris Gillibrand, Brussels, Belgium

I read that Rio Tinto is to reduce its debt by $10 Billion by end 2009 -'Reduce' ??
What does it owe ? ?.
I think that if 10 other organisations like that did so we might be saying 'What crisis?
The mentality which runs all this makes me think - let me have a go please - I think I can do better

Ron Allen, Monmouth,

Interest rates at 8%!!!
Thank our lucky stars Neil from Maidstone isn t running the country

Mark, GIBRALTAR,

"The pound has fallen to a record low against the euro this morning, nearing parity with sterling"

The pound nearing parity with sterling? Surely not!

Mike, Brighton,

Great job Gorden! My house is now worth a third less and the pound is down nearly 30% and falling more.....so that means you have destroyed over half my net worth.......and you plan to raise taxes in a couple of years to finish me off!

Gwilym Ashworth, Wisborough Green, England

Perhaps time to join Euro? I am not a big fan of the idea but.. bear in mind that if the pound goes below the Euro, it'd happen as in many other EU countries when joining the new currency means a good chance to round prices to the higher digit..while salaries are converted with no rounding at all!

Silvio, London,

Interest rates at 2% are the main cause of this situation. In previous recessions, interest rates rose drastically to input cash and get foreign investment in Britain. Brown's meddling has destroyed our financial future. Interest rates should really be near 8% at this time to get recovery going.

Neil, Maidstone,