The choice is recession with inflation or recession without inflation. The second represents not only one evil rather than two. It would also allow for an earlier recovery.

Steve, London,

They say the "average" person is paying more for food, bills etc but that this is being offset by electronics etc BUT I calculated that for this offset to be credible I would have to replace every electronic item I have every year..does that sound realistic in anyway?

Trevor, South east,

The gathering pace of economic slowdown in the UK, evidenced in today's RICS house prices and weak BRC retail sales, will do little to mitigate the rapid rise in the cost of living.
A decade of cheap money now shows itself in prices of all our basic goods. Money prices must rise to correct this.

Mike Harris, London, UK

They say the "average" person is paying more for food, bills etc but that this is being offset by electronics etc BUT I calculated that for this offset to be credible I would have to replace every electroncic item I have every year..does that sounds realistic in anyway?

Trevor, South east,

Gordon Brown: Stop devaluing the Pound, you are killing us. Stop your polictical interferance in the setting of interest rates.

i richardson, Redhill, UK

Its quit clear the M.P.C. [Bank of England] do not know if they are coming or going!

Paul, woodford green, united

petrol up 30% in 1 year
milk and butter up 20% in 6 months
wheat and rice up 20% in 6 months
steel and copper up more than 20% in six months

so if 3% is more than city analyts expected they should be sacked. True inflation is running at about 8%!

james mclean, edinburgh, scotland

Neil McF
Yes - but sorry to harp on on about *sole* remit. The 'economy' is not the MPC's responsibility, only inflation. I don't think we'll hear Brown talking about BoE independence again, because they patently are not.

Jonathan Spencer, London, United Kingdom

Imported inflation tends to deflate demand, which will in turn lead to lower output in the economy and feed through into deflationary pressures. This trend is broken if second order inflation effects occur, through rising wage growth. With the economy as fragile as it is deflation looks more likely.

Eco-Friendly, London,

Why is anyone surprised? Especially economists - the cycle is standard, interest rates going down lead to currency is effectively devalued, which in a country like UK which imports almost everyting means instant inflation.

BOE has no scope for cuts.

emma, london,

So when is inflation going to *fall* to 3%?

Paul, Coventry,

Like i said a 6 months back when rates were held..for every 1% of rate hold then expect a rate increase of 1.5% in the near future..inflation is a killer and is always first priority..

The credit crunch in the uk is just about to begin since house prices have only just started falling...

des, birmingham, uk

Adding to what Brian says, the value of savings/pensions are being eroded because of the TRUE inflation rate, not the one that is qouted by the statisticians.
As fuel and other commodity prices rise, the government coffers swell. However, this causes inflation so the public are punished twice over.

J Hughes, Newport, South Wales

Serious social unrest lies ahead unless the pound is stabilised. 12% of the imported inflation is due to the pounds depreciation. We need to raise rates to keep capital in sterling otherwise we face a sterling crisis and a 'Black Wednesday' repeat. There will be pain but lets not exacerbate it!

Steve Marchant, Broadhempston, UK

Like here in the USA, the neo-communists havnt let us drill or build new refineries in close to 40 years. So whats ttheir solution? Turn our food into fuel and export jobs. Even if we started now it would take us years and years to catch up so we keep looking fo OPEC who refuses to raise output.

William, Atlanta, USA

Oh come on were are tired of being lied to by these crooks in Nulabor. We all know the cost of living is rising at a far greater rate than this - probably well above 10%.

How convenient that its just below the level where the letter of explanation has to be written.

TC, London, UK

He who controls the oil price controls commodity prices, inflation and ultimately base rates round the World. Rampant market manipulation in the oil market needs to be forensically examined by the SEC & FSA. And which firm keeps raising the oil price target - Goldman Sachs, now want $200 pb.

Will, Lincoln, UK

ANdrew Iddon-yes you're right, but hidden inflation also lies in the amount of money printed. Money supply increases year after year, which means the value of money decreases, hence aiding inflation. The amount of pounds in circulation increase, diminishing the buying power of your existing money

ted, london, uk

3% inflation! Give me a break! More like 20%!

Babis, London, UK

How the economists can even utter 3% is beyond me.... What on earth do they measure?

Paul Garrish, Preston,

Much higher than the City expected? much higher than 3 percent in real terms.

JANE FLEMING, Whittlesey, Cambs

Whatever happened to Labours golden rules. When are they going to realise that their punative tax policy has a detremental effect on the price of all goods.

steve tea, manchester, cheshire

It was a very big mistake to start cutting rates last December.The banks didn't pass on the cut cut anyway,and all that happened is that sterling fell by 15%.The next move must now be up.

stephen hulton, eure, france

"No more boom and bust. Did you hear me, I was the Iron Chancellor. No more boom and bust."
Welcome to the real world.
Took you 10 years to destabilise the economy you inherited, and to squader away the reserves (remind me, how much gold did you sell off?).
3 pc is no where near the real figure.

ws, Manchester,

Will inflation take away our jobs or is it the weakening economy will result in likely lay-offs this summer and autumn?
Even with a job, inflation will may the monthly salary seem less. Raise the interest rate BoE?

Eddy, East London, UK

monetary policy has an 18 month lag and as such interest rate movements today impact inflation next autumn not next week. also the factors that are influencing this bout of inflation are supply side (oil prices and subsequent knock-on effects). the BoE only really impacts demand-side inflation

James Phillips, London,

The only action worthy of merit over the last ten years has been making the BoE independent. Now we need that independence more than ever to repel the political pressure. We all knew this was coming so lets take the medicine...

Leave rates on hold for 3 months or they may just have to RAISE them!

george, aylesbury,

I actually believe that interest rates should be HIGHER at the moment.
Why are we always looking for the easy way out in the UK? Surely that's why we keep having this boom & bust scenario.
People have been spending money like water and now we all have to pay the price I'm afraid.

becky, oxford,

In Scotland heating oil costs have risen from about 35p litre a year or so ago to well over 50p litre now.

DickW, Aberdeenshire,

It's not inflation due to the management of the economy - it's due to global cost increases in commodities and resources. The BoE has nothing to do with it - stuff is getting more expensive and it's not in our control.

Andrew J Iddon, London, UK

Well what does anyone expect when the 'independent' BoE are under Nulabour pressure to reduce interest rates 'ease' the problems of people who took out mortages they couldn't afford? 'You can't buck the market' as Thatcher said...

danoxford, Oxford, England

3% ....and the rest!

Richard, Bexhill, Uk

3% - yeh right! Can we beleive any stats from our political masters?

A sceptic, Norwich, UK

To Jonathan Spencer
They'll trot out the "financial stability" role of the BoE and say the cooling economy will contain inflation. I don't agree, but that's their justification.

Neil McF, Southampton, England

I agree with other commenters about the BoE's abject failure to combat inflation. It seems to have a very flexible brief depending on how Gordon Brown is feeling on any particular day. The Bank's so-called "independence" is a sham. Similar fatal policy errors were made during the 1920s and 1930s.

Peter Baker , fareham , UK

The decision to lower interest rates has been shown to be a disaster as it continues to fuel inflation.

A new approach is needed to try to stimulate the housing market such as the suspension of stamp duty and the reintroduction of MIRAS.

ROBERT DAWSON, NOTTINGHAM, UK

only 3% do me a favour real inflation is near on 15%.
these figures dont include the things that really matter food mortgages rates insurance.

dave , enfield, uk

So Gordon Is everything really alright? I dont think so...

Henry North, London, UK

Does this come as a surprise to anyone that hasn't just returned from a 10 year space mission? Every person and their dog knows that the real inflation figures (for things that real people buy and not the phoney CPI)) are way higher than this, more in the order of 8%.

Brian Roberts , Plymouth, Devon

This raises two questions:
1. Why did the BoE cut interest rates when they knew inflation was rising.
2. Can the members who voted for a rate cut last week actually read? Do they know that the *sole* remit of the BoE MPC is to contain inflation?

Jonathan Spencer, London, United Kingdom