Stephen, you hit the nail on the head.

As soon as we stopped measuring the real level of inflation we started on a slippery slope. This started under the tories and nu lab continued the farce. Inflation has to include mortgage interest payments, utilities, car costs aswell as food. You can not ignore these items as they are core inflation however you dress it up.

I would love to disgaree and say everything is going to be OK. However we dont really make anything. This is the core long term problem. Services we may be good at, but they do not support us, never have. However the British are a great people and we live in a great nation. We will not only survive this but flourish in the end. I just dont know how and when!

John, bath, uk

We left the UK for Dubai late last year & couldn't have done so at a better time, the country is in a right state.
My husband talks of going back when we are done with Dubai but I have no desire to live in a country where businesses & the government consider themselves more entitled (than us)to more & more of our money without actually providing anything in return, it had that mentality when I moved there 6 years ago & has constantly and consistantly gotten worse.

The, in your face, buy it now pay for it later attitude has come to a head & now the general population is paying for that recklessness in the face of rising interest rates.
Was back in the UK on the w/end, in 30 min of telly watching I got bombarded with so many ads encouraging more borrowing I felt panicked & a need to borrow & I don't live there!

It's no shock that things are in this mess now, the writing has been on the wall for a long time & the government has excelled at being as useful as a chocolate teapot.

Jennette, Dubai, United Arab Emirates

I'm with Austin, except I don't think this is just another delayed cyclical slump.. I think it's more serious than that:.

Telling people that the economy is doing well because the Dow (+15% per year since 2000) and the FTSE are doing well is little compfort for the man in the street who has LESS money in HIS pocket. A real-estate 'inflation' of 10% a year might be encouraging for the savvy home-owner that is becoming 10% richer each year, but that doen't REALLY affect his life-style: The house doesn't become bigger just because it is worth 10% more. However, first entrants MUST feed the banks with a 10% larger mortgage and the pick-up according bill at the end of the month. If wages don't keep up the whole show must come to an end. And this is it.

This isn't just a 'cycle' depression, it's the end of a 'growth model'.

Rui, Lisbon,

The country has sown a wind and is about to reap a whirlwind. I don't care one jot. I'm emigrating next month. Good luck all you suckers. You are welcolm to NuLabour. The country has got what it deserves.

Stan, croydon,

I don't have a lot of time for the Labour Party ,or indeed any polititians, but you can't really blame them for people who borrow beyond their means (present or predictable). The banks must take a lot of blame for giving out loans ad lib to fuel a culture of "must have today".

Rod, Preston, UK

The UK strong economy has been built on a huge debt mountain - I live in Germany now and you can see that the economy is more liquid than that of the UK, for instance, many shops and large retailers don't accept or discourage you from using credit cards, so people tend to pay with cash - which they must have in their pocket or bank.
In the UK, you can buy anything with a credit card, even a paper, provided you spent more than one pound.
This debt problem is not going away by the BoE dropping interest rates lower, it just means that people will pay out less interest on their debt! The problem in the UK is that when there is a finacial problem, we tend to spend our way out of it - perhaps we need to start thinking about saving our way out of it - with real money we have, not borrowed money.
Carlos, Germany

Carlos, Regensburg, Germany

If there is no other way out of the current debt crisis then inflating away the debt problem has been the traditional answer since WW2 . The Central banks of the US and, to a lesser extent, the UK are flooding the market with liquidity. The consequences won't be pleasant - see the 1970s .The alternative is a slump like the 1930s . Anyone who believes that the terrific party we've had in the past few years hasn't to be paid for is dreaming. We've been bingeing like there's no tomorrow, but forgotten about the consequential hangover. Good luck everyone and pass the paracetamol, we're going to need lots of it.

protogodzilla, London, England

gmac, kassel, germany - there's one flaw in your suggestion that British women should divorce their husbands and take 67% of their income, present and future: unlike their German counterparts, British women work! You've taken a singular case and turned it into a generality; if only. In many households, women earn as much, if not more, than their men. We, anyway, long ago gave up the 'little woman belongs in the kitchen' mindset, so beloved of German men. And it's hardly unknown here for divorced husbands to disappear, leaving their wives and children to struggle to survive.

anne, bournemouth,

There has been too much materialism over the last few years. I'm pleased that is coming to an end. All the smug people who previously sneered at me for not having the latest camera, sat nav, cuppachino making mobile are now asking what the cheapest pay as you go deal is.

Luke, London, UK

When I first visited India - the smell, filth chaos all disgusted me that i wanted to throw up. Now when i travel back to the UK from Germany I feel much the same, and it seems to be getting worse. Britain is now a 3rd world country, so lets stop pretending otherwise.

nandakuamar, munich, germany

The UK should have been in recession in 2001. Instead Bliar wanted to run for a second term and inflated the economy with lower interest rates. This is something that was done regularly before by Callaghan (see his discussions with Benn in 1970's).

As the cyclical nature of economics was postponed in this way and asset values deliberately overinflated, there is nothing now that can be done but to let the economy go into a proper well overdue recession. This will be painful but will at least smoke out the property and share speculators so that the real economy can return back to normal as quickly as possible.

Austin Tassletine , South West,

Think its bad now wait till the Russians cut the gas supply. How long will it be till the petrol situation hits the fan?
This country has always been a ship of fools kidding ourselves that we are great. As in everything the only winners are those that run the show whilst filling their pockets.

Yes it has always been a country to die for.

G. Anderson, Northampton,

And the poorest workers will now pay more in income tax; and nobody cares. The public is dispirited and without hope; Parliament is just a bunch of pigs troughing for all they can grab at the public expense - none of them cares much about Britain - only their own short term interests, and we truly are becoming a third world nation. Our money robbed from us and given to single mothers, drug addicts, illegal immigrants, and the greedy rich of course.

I want out, but I am trapped by poverty.

That empty plinth in Trafalgar Square should be given to Guy Faulks; he knew what to do with the buggers.

To the barricades...

Colin Smith, Norwich, UK

Until 3 years' ago, I was a debt collector. I'll give it a year, then return to that trade. There will be good money to be made on the profligate.

Terry Dell, Weybridge, UK

No-one seems to be speaking the unspeakable. The truth is this borrowing is to cover mortgage payments in light of increased mortgage costs.

People can no longer cope.

It's gong to be nasty on he housing market.. Because a market with no customers has no foundation. And no. It isn't 'different this time'.After speculative bubbles caused by greed during which fundamental intrinsic value of a commodity was completely ignored, , it never is.

MD, Varna,

For any women out there, the answer is simple. Divorce your husband and you too can walk away with 67% of everything he has ever earned or will ever earn.

gmac, Kassel, Germany

The British public have been well and truly stuffed. The low teaser mortgage rates were specifically designed to hook borrowers in and now the variable interest rate screw has been turned viciously against them - a classic money-lender's ploy. Some commentators argue consumer debt has been good for Britain - but what they really mean is good for Britain's financial elite. Debt makes a poor man poorer - it was ever thus. The current generation has no memory of depression or unemployment. They need to be reminded that money does not grow on trees and perhaps to that extent a serious recession or depression would be a very good thing.

Peter Baker, fareham, hampshire

Why is anybody surprised?

The UK's "strong economy" for at least the past 5 years has been little more than a mirage propelled by an unsustainable debt bubble.

It was only a matter of when the bubble burst.

Now that it has, it is inevitable that the whole sorry mess will be exposed as everything unravels.

What amazes me is how many people still think that there's nothing to worry about.

Next time you go shopping, have a look at how much of what's on offer is imported. Then try and work out where the money comes from to pay for it.

Then prepare to be a 3rd world country within a generation.

Jon Leigh, Southern, France

Could somebody tell me one think that has improved in 11 years of a Labour Government, from where I am everything seems a mess

david, evesham,

And given that the pound has lost some 10% of its value against the euro, in the last few months, things will only get worse, a lot worse.

Robert, Ipswich,

To - Sean Hamerton, York., England,
The bad news is that 'New Labour' was just old Conservatism,
mutton dressed as lamb. Getting rid of Labour will make no difference, you are replacing like with like - same policies different name. Labour were actually more consertive than the Tories, at least when the Tories were in they had an opposition.

And bill, Ust Kamenigorsk, Kazakhstan, - I am coming to join the glorious republic of Kazakhstan, from Borats reports it sounds a great place to live compared to the UK!!!

You have oil and gas and many nice pretty women who are much unlike the New Labour feminists!!!!!!

Brendan, Nottm, UK

Looks like I got out just in time! Recession is around the corner for UK, but to be honest it's not unexpected! Whatever happened to Gordon Browns' puffed-up proclamations that Britain would never return to the days of boom and bust under a Labour govt!!! The boom is over, the bust is round the corner - bet Tony Blair is laughing up his sleeve right now!

Jonathan Main, Kuwait City, Kuwait

Maybe they are withdrawing savings because they don't trust the banks and would prefer to sacrifice the little interest they would get on those savings by stashing the cash at home. Also, food and fuel prices have risen by over 10% in the past four months alone, something the BoE have singularly failing to recognise.

Paul, Coventry,

The UK is now in deep structural decline. All this borrowing is just an attempt to maintain living standards but it cannot last. Living standards are set to decrease - possibly for a generation. Meanwhile it will increasingly resemble a 3rd world country as it slowly falls apart.

I live and work in an old Soviet Mining town in Siberia. The place is still poor in comparison to western Europe but the standard of living is increasing and things getting better as the place grows and develops. People are therefore reasonably happy.

i know where I'd rather be - which says something.

bill, Ust Kamenigorsk, Kazakhstan

Britain has had it.
The good news is, so has Labour.
The next 12 months will see people cash strapped and in debt up to their eyeballs.
Worried, worried people and their expensive accomodation investments paying hand over fist, scrimping and saving to live in stagnation.
(Most won't call it poverty, looking around, it will be a higher standard of poverty, though that's what it will be).

It isn't just the banks and the general public that can't get their hands on the money.
People do not realise Business is suffering badly as well.
(This has been deliberately keep out of the publics mind)
There will be mass unemployment when employers have to cut their expenses just to survive.
Things will get so bad, Labour may not even last a full term.

Sean Hamerton, York., England

don\t worry, it will go better

caodacheng, Kunming , yunnan.China

A lot of todays problems originate from the use of the CPI instead of the RPI.The UK has huge problems regarding debt,real inflation and low official inflation.The economy is a shambles if you include the NR fiasco in the public finances.

stephen hulton, eure, france

Looks bleak.
My advice, escape and come to China! Not only is it cheaper, but the government gives you less grief.

Richard Tapp, Beijing, China