Why cannot people speak honestly that the emperor wears no clothes? It is not about politics but that asset values (housing and shares) have risen above normal growth rates. A correction will occur. The spending was just a symptom that people felt good because of inflated asset prices.

Dean, Sydney , Australia

We are reaping what Brown sowed as Chancellor.

John, Colchester,

Peter in Cheam, you jest surely. If we were in the Euro we'd have had interest rates as low as 2%, for Germany's benefit, instead of 3.5%. Look at the Irish and Spanish property bubbles and see what good Euro membership did for them, unable to raise interest rates when they needed to.

Paul, Coventry,

My steel company is experiencing incomprehensible price increases which have already reached hyperinflationary levels this year and more to come in the next 3 months and beyond. Clients have already abandoned supplying their customers because they cannot pass on the increases. Very recessionary.

A.Williams, Cradley Heath,

http://arabianmoney.net/2008/05/15/financial-markets-in-the-eye-of-the-storm-worse-to-come/
We have not seen the start of this have we? Let's be realistic!

peter, Dubai, UAE

Why do those who create the problems believe that they can solve them, one may ask. The answer is they cannot, but only say they can in order to retain power, money and their outdated philosophies

Jim Wills, Brisbane, Australia

New Labour were lucky to have governed in the 'nice decade'; midlle class voters saw Blair as good as a Conservative Prime Minister. The fall in house prices will cause a dramatic reversal and Gordon Brown will live to regret not going to the country last November.

john, milton keynes, uk

P.Goddard, I'm not sure why you think the euro would have prevented the consumer debt-fuelled situation we are now in. The same problems are evident in Ireland and Spain - both eurozone members. Also, EU hasn't stood up to France or Germany's persistent rule breaking regarding debt/GDP ratios.

L N Stewart, London, UK

UK full of talked up recessions led by doom monger media, no wonder all the Brits here plan to take welcome early retirement and pack up for Australia. UK wastes millions on hand outs for a growing proportion of people who realise not working is the best way to make a decent living ..

DD DXB

Donald, Dubai, UAE

Clive, I'm in the same boat and couldn't agree with you more. I was just saying that the squeeze is world wide. Yes, I agree that our government can do a lot more to help releave our misery.

Hamad Lone, London, England

Be fair Brown has ended "Tory boom and bust", he has provided "Labour boom and bust"

Richard Boyce, Haywards Heath, West Sussex

It's too late now the horse has already bolted. Labour's mistake was not trying to control house price inflation/lending. If houses weren't so expensive we would all have more disposable income. Now Labour's answer is to try prop up the housing market so everybody can continue to be falsely rich.

Fred Sly, Elgin, Scotland

the U.S. gives out a simple tax refund to give some money back to the people when times are getting tough. Brown screws with the tax structure and comes up with this overly-complicated plan that in the end no one supports. Why is he so thick?

James, London, England

the price of living in this country is so high mainly due to the taxes Labour have instilled and they are telling us that things are only going to get tighter? a bit hypocritical considering they continue to raise taxes even though the economy is tanking leaving us even worse off!

James, London, England

2 years! Is he serious? It will take many more years for the problems wrought by this incompetent government to work through the system.

John, Lincoln,

Mervyn King has been re-employed for another 5 years by Gordon Brown for King to tell the Public what Brown and Darling
havent the guts to tell us.

Were THEY to tell us, what he is now telling us, they would be politically ruined.
A Labour party MOUTHPIECE of ill tidings of labours making!!

Sean Hamerton, York., England.

Where do they get 3.7% inflation from? I have used the calculator on the National Statistics website and my personal inflation figure is 8% from 11% in Nov (not including additional taxation direct + stealth). At that level the period 2004-9 I'll be down 50%!

http://www.statistics.gov.uk/PIC

Phil, Rugby, England

Absolutely ridiculous. Brown and King were the architects of this recession. They took all the wrong decisions and went for risk-taking ventures rather than those of a more prudent nature. They knew the risks, and they hid it from the stakeholders. Both should step down immediately.

Stephen Pain, odense, denmark

If we were in the euro, we wouldn't have this mess.
We would have low interest rates, and low inflation and the government would be obliged to keep its house in order.

It is now time to join the euro zone and start sharing in the success of the euro in England.

Peter Goddard, Cheam, England, EU

This man Mervyn (Einstein) King is the same man who was sanguine on the plight of consumers just 4 weeks ago. He is out of touch and has no understanding of the international inflationary pressures which are outwith the Bank of England's control. He should concentrate on stabilising the UK economy.

james mclean, edinburgh, scotland

If GDP growth was all that mattered Zimbabwe would be top of the league. But sensible people realise that sterling's international value must be maintained to prevent our import prices rising unnecessarily. The choice is higher interest rates and/or lower Public Spending - or sterling crisis!

Steve Marchant, Broadhempston, UK

Who does this fool Brown think he's kidding. We are in it up to the neck and it was he who squandered the reserves and put us where we are today. He is prying for the same sort of luck that rescued his stupidity on so many occasions but he will find out it has run out this time.

D Case, Newquay,

I would remind those leaping to Gordon Brown's defence that, back in the 1990s, he was the one who spoke of "Tory boom and bust". The clear implication was that damaging economic cycles were something that Conservative politicians caused. Now he is in charge, it's all the fault of global conditions.

Tom Welsh, Basingstoke,

The press, business and politicians are intent on providing a self fulfilling prophesy of recession. These very people who should be up beat and positive and actively working to prevent a recession are just priming us to fail. If a football manager used these tactics he would never win a match

mike gee, bournemouth, uk

Don't you just love it when "experts" on mega bucks talk of the squeeze? Then what are the odds of taking a pay cut? What!!?? Yeah. I didn't think so.
Someone please turn the page for Mervyn King and Gordon Brown and all the selfish sanctimonious patronising and self righteous "experts". Thank U!

willo, milton keynes,

No thank you Mervyn King. We do not need to be warned of recession lasting 2 years when we've known that already for 9 months. Rather than your gloom and doom forecasts why don't you listen to speeches this year by Bernanke and Paulson and deliver some confidence in the future for the UK ?

Will, Lincoln, UK

Amazing, what happens in Britain happens in America. Do we both have the same incompetent leaders, or do the central bankers really run the show? I tend to lean toward the fiat money producers since they have most to gain. Without gold and silver, there's no protection from the robber barons!

james, Tampa, FL, USA

With all this doom and gloom predicted isn't it about time we put some effort into reducing the cost of government. Reducing the number of expensive MPs (fewer consituencies), reducing the expenses paid to them (when in London they could stay at the Ritz). !

Mike Elmes, Ystradmeurig, United Kingdom

Unfortunately Mr King and the Government have incompetently handled the credit crunch making its effect on the UK much worse than need be.

Fortunately most of the public, as the elections have shown are not falling for their excuses - their spin machine is losing its effectiveness!

David, London,

Lets face it we've swerved the normal 10yr cycle realignments and given the credit craze this time round we will need to bite the bullet until its all washed through. At least in another 12 months time we'll have a complete picture of the mess created and look back saying lessons have been learned ?

Quinn, Birmingham, England

So inflation is going to climb to 3.7%? With fuel prices having gone up already by more like 30% and food following suit no amount of fudging the figures is going to persuade most ordinary people that the real figure that affects our budgets is anything like that low.

Mike Heenan, Gloucester, UK

Howard from Chester, are you saying that high taxation reduces the money supply? So you don't think the Government spends any of what it taxes us? You may have noticed the UK's giant public sector, funded by...taxes

Mimi, Hull,

This is an international problem requiring national action. What can be done to reconcile the differences emerging between what the present Government perceive as shorter term reactive solutions and what the Bank see as a longer term prognosis.

William Grierson, Kimpton, UK

When King will leave BoE? He is incompetent.

Gopal Sharma, Loughborough, England

If I were Gordon Brown that's what I'd love to be judged on.

Because it might mean we'd forget about the massive wastes of our taxes on failing public services, the unbelievably tax-take generally by stealth- introduced by HIM, higher violent crime rates, and general lower standard of living.

Tim, Bath,

Speak for yourself Hamad. I'm suffering because I work for a living and see most of my money vanishing in taxes & government waste. I'd rather see the state sector and handout classes feel some pain for once.

Clive, Edinburgh, UK

Why take an interventionist approach to the 'struggling' housing market, which is only turning into a decline because house prices are unsustainably overpriced?

What happened to supply & demand? This is a purely political move to appease homeowners to the detriment of those not yet on the ladder.

Ian B, London,

Peter in Leicester - you hit the nail on the head ... "the economy was in a farly good shape etc" . Why was this ? Do you remember the 80's and the unemployment issues.? - I do. Gordon B squandered our opportunity (and our Gold reserve).
Labour are just too silly for words.
Bring back Mrs T !!!

Steve, Kidderminster, UK (until I retire!)

The elephant in the room is peak oil.
Demand is greater than new discoveries, and it has been for a very long time, hence price rises.
Everything depends on this increasingly expensive resource. This is not a cyclical but a structural problem that higher interest rates will only worsen.
Be afraid..

CS, Norwich, UK

Why dont all you poms sell your houses now (lets face it they are old and crappy anyway), come live and work in Australia for the next 5 years where we are in the middle of a once in a generation boom and need all the workers possible, and then return to buy your house back for half the price!

luke, perth, australia

Brown is staking his position as PM on his economic management?? what?? the fool sold 50% of the British gold reserves at $350 an ounce, gold is now $900 an ounce!!

luke, perth, australia

If King thinks he can control inflation by keeping interest rates up then he is a fool. The interest rates are up because of Global forces out of his control. The sooner he reduces interest rates the sooner business will drive us out of this mess.

Mark, UK, Gods country

Having reduced rates to 2% to prop up growth the US are still discussing whether they are in a recession and if so how deep it will be. By comparison the UK and BofE has dithered, didn't cut rates when they could have and now run the risk of a protracted recession. How does King justify a salary?

Will, Lincoln, UK

We're all doomed, Captain. She's gonna blow!!!!!
Whatever the state of the economy, however much food and energy prices rise, whatever the cost of living.....people will continue to live and people will continue to buy things. The state of the market may be changing but it's still a market.

Paulie, Loughborough, England

This mess will take 10 years to sort out. I can forsee a very steep decline in house prices of 30% in the next two years followed by very week growth for another five years after that. We all watched the madness and almost believed it but the inevitable recession is now on its way.

Chris, Oxford,

"Mervyn King braced Britain for a grim two years of economic misery with a vicious squeeze on people's living standards."
Haven't they noticed that there has been a vicious squeeze on peoples living standards for years. At least those who work and pay taxes.

Richard, Alicante, Spain

It is a fact that there is a global tightening of economies. Everyone is suffering from high fuel prices, higher commodity prices and the credit squeeze. So why do we still need experts to tell us the obvious. We've had the good times, now let us suffer a little.

Hamad Lone, London, England

Inflation is above the BofE's target 2%. The Government releases 2.7billion into the economy by reducing tax of 22 million people. Raises inflation, so further rate cuts must be delayed if the BofE is to move nearer to target. Self evident.

Howard, Chester,

It was obvious six months ago that the BoE should have raised the base rate not cut it and we are now reaping the inflationary results of those subsequent disastrous decisions. The base rate will definitely need to go up before the end of the year and the sooner the better.

Paul, Coventry,

What's ironic about politics is that people always tend to identify the one who's in power as the source of all problems. There's a global crisis which is hitting all of the western world. Changing government won't stop the crisis. In a globalized world national governments aren't bigger than fleas.

Horace, Florence, Italy

UK not in recession...Have all the 'civil servants' in goverment, yes , towns and cities, as well as the National Govmnt, take a 25% pay cut ,except the military, give them a 25% increase...and watch the good times roll for the economy.....and just for good measure, have them work saturday /sunday..

Mr Tim, san marcos, U S of A

I don't know if it is just me but everything that come out of gordon brown's mouth no longer fills me with optimism - he is just looked upon as a joke - bad times ahead, we might as well just get used to it, no end to the economic cycle for a few years yet!

Gurd Sohi, Edinburgh, Scotland

Economy goes up and down. The UK economy has been expanding for 15 years, the longest period of growth recorded in its economic history, so a contraction is just natural. A short-period of recession may not necessarily be all that bad if it can help clear all the existing economic bubbles.....

john, Hong Kong,

Gordon Brown and the Labour party at large continue to blow their own trumpet over the "stewardship" of the economy. When they came to power in 1997, the economy was in a fairly good shape - the county just felt it was time for a change - and they have put us further and further into national debt.

Peter, Leicester, England

Rocks and hard places. Low interest rate, low pound, high import prices, high inflation; or high interest rate, higher pound, lower import prices, lower inflation but maybe lower growth. Get the balance wrong, and stagflation, the worst of all possible worlds.

David, sydney, australia