It all depends how you measure inflation, Richard!!

Ian M Jones, Reading, UK

The weakness of the £ and the $ is the reason for higher oil prices and not the comments of the head of the ecb who has been an outstanding cental banker.
If people want cheaper oil then intrest rates will have to rise.
Britain has the outstanding record of holding one fith of the worlds debt.

bob, hants,

"The chancellor was thrown on the defensive when Osborne accused him of acting like a rabbit"

There is the real worry.

With all the problems we have that's the best the Tories could come up with as an opposition policy!

Gordon, SELL ENGLAND TO DUBAI! and then go on holiday!

john, woodbridge,

Surely, an increase in interest rates will add to inflation, not reduce it. It only means more profit for banks and more inflation for most people. That can't be right!

Richard McCoull, Reading, UK

Precisely what makes these people "experts"? Based on my qualification (sic) as an economics graduate, the monkey and the dartboard analogy seems highly relevant. The experts are simply the luckier monkeys. And when their luck runs dry, new monkeys will replace them and new gulls will listen to them

Billy Barnett, HK,

"Prices in London are never going to be cheap - the whole world wants to move into here."

Really? I don't think so Harvey. I'd rather live somewhere, warm, sunny, quiet and peaceful. And I do.

Jenny Tardram, Vilamoura, Algarve, Portugal

Why is it that when property prices casually increase by 20-30% a year we all seem to smugly take it in our stride but when property IN SOME AREAS only drops back a few miserable percent we think the World's come to an end?
Prices are absolutely absurd and have been fuelled by low int. rates.

Pedro Tam, London, UK

Supporting the housing market by trying to cut interest rates is ridiculous. Houses remain seriously overvalued and keeping them there is causing a lot of distress. Inflation will be a disaster if it returns and will destroy a lot of people's savings, clearly showing that saving is not worth it.

Colin, shrewsbury,

The price of oil has risen due to the release of US unemployment rates rocketing which has hit the dollar. It has nothing to do with this announcement.

Fred, Moray, Scotland

There has been in the past decade catastrophic hyperinflation in the property and services markets disasterously ignored by central ganks focussing only on the CPI: a wholly inadequate measure of inflation. This is the right direction, but far, far too late.

James E. Petts, Burnham, England

It might start off as international commodity inflation, but as these increased costs leach into the economy, then we will have domestically driven inflation. Extrapolate and Expomenta l- they are all words that are suitable for describing what will happen

David Nammory, Liverpool,

I'd rather have a single increase in my costs with a mortgage interest increase than see all my other costs increasing out of control via inflation.

Didn't someone liken inflation to toothpaste: you can't easily put it back in it's place?

Basil, Horley, UK

Bring on increased rates I say. Much better for my savings!

Mr J R Chinn, Winwick, England

Will this de-coup inflation expectations? Unlikely... Expect wage rise demands next and an eventual price-wage spiral (That 70's show)...

Sam Cooper, Wellington, New Zealand

I doubt many in the 'city' have been 'stunned' - many people have predicted what is likely to happen, it's just that no one wanted to believe them - truth is people don’t know what is likely to happen in the future – but it currently looks very bleak – and Gordon should take a lot of the blame

Simon, lONDON,

Give us higher interest rates rather than higher inflation rates!While we have a bubble in oil/petrol and other energy costs,the European Central Bank is right to take this common sense appproach and warn about raising interest rates if inflationary pressures continue.

John, Isle of Wight, UK

How can the city so called "experts" be stunned? Look at Trichet's record. He is incredibly conservative and inflation not growth has always been his number one pririty. Look for the euro to reach parity with the
puny pound by year end .

rob, colchester , uk

To Chris in Bagshot - wonder if you'll regard it as a plunge when your '260k' house is worth '130k'. Give it two years.
A house is only worth what someone can borrow to pay for it. Take away, limit or make that borrowing more expensive and houses will return to a sensible salary multiple.

Hilary, Southall,

It seems that inflation is caused mainly by Energy prices which the general public have no control over. So how are we ever supposed to control it and keep interest rates down. Seems like a downward spiral regardless of 'High street spending'.Rates above 5% will be very difficult for most to survive

Billy Bop, London, UK

Laura, 'sold to them on the never never by unscrupulous 'advisers': this mentality of refusing personal responsibility and playing the blame game isn't a healthy trait for society to have. Caveat Emptor.

Tony, Maresfield,

The EC b has shot itself in the foot, look at the rise in oil prices already as a result, !!. true!.

jim, donegal, ireland

There has been continuous reporting that house prices are far too expensive and that they are not affordable. Now that prices are coming off these inflated levels this is being reported as if it is some sort of catastrophe. How can anybody in their right mind think interest rates should go down?

Ian, Chigwell, Essex

We urgently need a Govt of National Unity as the UK is headed for the biggest crisis economic crisis since the Great Depression. Urgent cuts in Public Spending & particularly the £1000bn of pension & PFI liabilities are required to prevent a sterling crisis. Otherwise its time to bail out of UK Plc!

Steve Marchant, Broadhempston, UK

I want inflation to be kept under control even if this means interest rates go up and property prices collapse. At least people will learn the truth about property prices and stop believing all the bull they hear in those tv property development programmes.

Charles, Birmingham,

Why continue to link a housing slump to BOE rates. It is the retail banks who are likely to cause a slump because they either won't lend, or don't pass on the reduction. BOE has to control inflation for all of us. The retail banks are just plain stupid, greedy, or both.

Jimd, Norwich, uk

The main concern is our govt does not understand the time delay effect with regards to rate changes.
Also base rate is pointless LIBOR is the real rate and the MPC/BOE under Mr Browns control are sitting on the fence.
Rates should rise by at least 2 % to balance out the economy we need action.

Jay , Manchester , uk

The city is stunned? perhaps it's because the ECB and the MPC have ignored its main remit, inflation for so long,that it realised that it cannot do so any longer...

cww, suffolk,

Any more interest rate hikes and we can no longer afford our house. Reasons: we're young, have average yet demanding jobs with low pay and didn't get on the housing market at the right time because we were in post-graduate education.

The economy is so wonderful.

Matt, Southampton, England

Thank goodness for one central bank taking its obligations seriously.

Bruce Robertson, Brighton, UK

Paul, Coventry,

Hyperinflation affecting the rest of us?

Tell that to the people of Zimbabwe!

Kevin Browne, Reading, Berkshire, England

'The comments surprised bond markets, igniting fears over inflationary dangers'.
Incapable of reading the european inflation figures for themselves? The economy is driven by incompetent investment analysts, reacting to each other in the same way as house buyers and sellers ...boom bounce boom etc

Richard Elliot, Lisbon, Portugal

Strange the story is mainly about the ECB's comments about inceasing interest rates to fight inflation but vertually all the comments ignore this and continue to babble about the UK housing market which is no longer an inflation worry.
Trichet's comments are an inflation worry lok at the markets.

Dave, Mold, Flintshire

I bet interest rates will need to hit 15 per cent to combat inflation. It will happen in fits and starts and in a panic, but the bank will have to get there. Iceland is already there. Real inflation is already there.

Bob Macdonald, London,

Lucky enough to own a house value currently 260,000. How is 13000 pound less value a 'plunge'????

chris, Bagshot, Surrey

To Harvey, London - what happens in the Chelsea bubble is hardly indicative of the wider economy. The problem is the Government and the consumers of the UK have borrowed far too much for far too long and now the bills have to be paid!

Richard, Kidderminster, England

We are buying a house in Devon and had to go to written final offers to secure it. On the other hand lots of properties remain unsold. Strange market at the moment. The house we are buying was sensibly, even slightly under priced (in our opinion). Property that is priced sensibly is still selling.

SB, Dartmouth, Devon

Prices in London are never going to be cheap - the whole world wants to move into here. Those dreaming of a 30%crash will be waiting for a very long time. Think about it: you're all hoping for a crash, so that you can rush to...buy! What do you think this will do to prices?

Harvey, London,

The city is shocked, These people get paid millions in bonuses and from what most communtators have said recently they cannot predict what is going to happen in the markets in the 1 hours time, I wish I could get paid millions for working in a big betting office.

Breton, Square Mile,

Laura please dont judge all advisers as being unscrupulous. I am an adviser and the first thing I do with with any client is identify how much their budget is each month which then dictates how much they can borrow. If they want to borrow unrealistic amounts I wont do the business.

Mark, Ipswich,

The City is now waking up to the reality of hyperinflation that is affecting the rest of us - and about time too.

Paul, Coventry,

There is a long, long way for house prices to fall before the excessive lending of the last 10 years is corrected and we are only at the start of the fall. I wish could afford a house for £150k let alone a house in Chelsea for a million.

Chris, Oxford,

Grim? About time. Young people will be able to enter the market at prices they can actually afford, rather than at 5x their joint income, sold to them on the never never by unscrupulous 'advisers'. Hurrah!

Laura Pelling, Twickenham, UK

The UK is simply 6-9 months behind the US in terms of the real estate bubble. The US bubble popped in March 07 and it took until Jan 08 for significantly lower prices to start being reflected in the statistical data. UK household debt and housing price increase are at least equal to the US.

Chris, New York, USA

Why is the City stunned?The country cannot keep spending boeeowed money?There is a £1.4 trillion debt mountain to sort out.The people who should be encouraged to spend are those who have money, and they will be hoping for higher interest rates in order to protect their savings.

stephen hulton, eure, france

Harvey

A 3 Bedroomed Flat in Kensington Hey.

Prices in Chelsea and Kensington have always been 5 or more times the national average, I would say wait a while and they most certainly will be < 1 Million, however if your looking you can obviously afford it so dont let me stop you !!!

Peter, Aldershot, UK

Trichet's comments certainly helped the inflation fight with a $5.00 jump in the oil price. He would have helped himself and the rest of the world if he had kept his mouth shut.

Dave, Mold, Flintshire

Bob

Health economy - Says who ?
Low unemployment - Agreed ( at this moment ) but employed doing what ?
Affordable cost of borrowing - Have you been in a coma for the last 6 months? The credit crunch is all about the fact that the borrowing we had was "Not Affordable".

Peter, Aldershot, UK

'brutal housing crash'? Rock on Tommy!

Graeme B, Oxford,

A brutal property price crash is exactly what we need, hyperinflation we must simply avoid. If we cut rates and the US raises them then we could easily see another 15% increase in fuel costs from rapid currency adjustments.

John P-T, Reigate,

Scaremongering appears to have had the desired effect however. Despite a healthy economy, low unemployment and affordable cost of borrowing, we appear to have managed the unique feat of talking ourselves into recession. Go the new media age...

Bob Smith, Melbourne,

Scaremongering of the highest order. We are currently looking for a 3-bedroom flat in Kensington & Chelsea and there's hardly anything below 1M with all the decent ones over 1.5M! Restaurants are bursting at the seams and pubs have never been busier.

Harvey, London,