So much for BoE "controlling inflation" through interest rates. Doubtless there is a strong correlation between base rate and inflation - that's inevitable as BoE moves rates in line with the CPI!

John, Ayr, UK

So the prudent with savings will earn little interest, inflation will soar and reduce the real value of savings, and the pound will devalue.
Why bother being careful?

Stephen B, Henley, UK

so we are back to the 1970's with high inflation and high unemployment. great.
well done New Labour for making a mess of things in the same manner as your parent's generation did.

frank, swindon, uk

Think savers, and REAL (after inflation and tax) interest rates?

Simon, Mons, France

The insanity of reducing interest rates when Britain is so heavily in debt and when it is so necessary to attract overseas funds and encourage saving, is breathtaking. Brown wants thrifty savers to encourage further reckless borrowing -it is despicable and mad economics.

f.hanson, worthing , sussex

Keynes said it in the 1930's - (paraphrasing) - cutting interest rates in a slump is like pushing on a piece of string.

Mark Campbell, Manchester, England

Interest rates were on the floor throughout the 1930s with no beneficial effect whatsoever. The government is thinking no further ahead than a dose of inflation (which will be blamed on someone else) to reduce the debt burden and low interest rates to make room for the higher taxes that are coming.

John, London, SE, UK

The bankers will not pass on the reductions in full, they will increase marginal profits at the expense of the thrifty (Theres a good old word. Note that in Japan official rate 0.5%; banks lend at 5%!! They went through all this 15 years ago. Shafted again. Watch the client state grow like Topsy.

john, cheshire,

Cutting interest rates to help the economy is akin to giving an alcoholic a double brandy and coke to help him with his withdrawal symptoms.

Ollie Reed, Tunbridge Wells, England

It is time to move your savings abroad folks .Take them to Germany . If the BOE reduces the interest rate it will be more problems for the economy. Can they see that the banks are not willing to lend even if the BOE makes rates zero% and the problem is not the rate but savings.

NICHOLAS Bsc Economics, LARNACA, CYPRUS

Its Time to move your savings abroad people.
That is of course if you have any left after 11 years of lunatic government spending.

Sid Jacques, Durham,

The self-interested and the media men who regurgitate their pap have delayed us too long. When the credit famine relaxes inflation will sky-rocket, and there's now damn all the BoE or anybody else can do about it.

Noel Falconer MEcon, COUIZA, France

Anyone remember how interest cuts earlier in the year had no effect on releasing funds from the banks, residential or commercial.

Why is that? because step 1 is for banks to start lending to each other, which has absolutely nothing to do with the base rate, its about banks trusting each other.

John Green, Callington, UK

James Manch
If only handling the economy was that simple, ie its doing well raise rates things not so good lower them, we are currently in recession no need to be talked into it and its been caused by lowering rates ( greed ) while doing well - More at stake now than simple interest rates.

Peter, Aldershot, UK

A Times columnist recently put forward the idea that the government may actually want higher inflation because it effectively reduces their and everyone else's debt. So, expect rates to fall, inflation to rise and all those who have sensibly saved money to get shafted. Low rates are the problem!

Frank Hegarty, Farnborough, UK

Without substantial public sector spending cuts, interest rate cuts will do little good. The country is overborrowed both individually and collectively. The public sector will siphon off extra money for a social budget, which given present trends, is likely to increase greatly in the next two years.

Michael, Great Yarmouth, England

So there we have it, proof, as if it were needed, that the government ARE breaking it on purpose.
Lower interest rates will only make the coming situation worse, we need a return to the good old value's of saving and living within ones means.
Hike up the rate for goodness sake.

Tom , Caernarfon, Wales

There are 24 million small businesses in the EU. 12 billion Euros represents about 500 Euros each. Not enough - to make any difference at all!

More futile gesture politics from GB and another insult to voters intelligence - most of us can divide one number by another.

Ray, Cambridge, UK

We need to stop talking ourselves further into recession. Get real! A coordinated effort will put us back on track. The BOE needs to act quicker to slash rates. We all know it's coming so for God's sake, do one right and get on with it.! Heaven only knows what it's been doing until now!

James, Manchester, UK

WIth online financial news there is now a notable contrast between the general consensus of readers comments and the tone of many of the articles.This disconnect between these viewpoints is mirrored in the people's view vs the official government propaganda line....a smell of revolution in the air ?

Derek, Cape Town, SA

Would an increase of the base rate would encourage savings? Unless savings are higher than mortgages we would be better off with lower rates. And maybe we should invest offshore considering that our banks cannot function as banks!

andrea ceccanti, london,

Nope rates will go up not down. Any bailouts are for those bankers and other elites. Its pay back time and they do not care who gets hurt, it has happened before and it will happen again...

R McAuley, Antrim, UK

What a joke Gordon Brown is ...... helping small business .... guess he's forgotten about the 3% extra corporation tax he's introduced on small business. Why doesn't he scrap that????? That would certainly help!

Anton, Fleet,

So what, the Japanese tried that yonks ago. The lenders will ignore the BOE as they have been doing for a long time now.
Does anybody know anybody who knows anybody -ad finitum who borrows at 5% ?

Victor M, Cricklewood, England

Small businesses need to be recognised as giving good value for money and allowed to compete. Red tape, tendering rules and a resentment and contempt for small businessmen by government is a poor basis for this. A cut in interest rates will merely extend the death sentence.

Richard Evans, Huntingdon, Cambs

If the issue now is not whether the BoE cuts the base rate but by how much, then similarly it is not whether savers will move money offshore but how much. Expect Sterling to plummet and food price inflation to go hyper, dependent as we are on imports, for which there will be no reduced demand.

Paul, Coventry,

This will have little effect on mortgage rates as they are mostly geared to LIBOR , thus we have the situation where MLR falls and Mortgage rates go up following LIBOR. This rate will need to rise further begore Banks lend to each other again

V. Cooper, Somerset, UK

I wonder if any of the people suggesting not cutting interest rates are in danger of losing their jobs due to recession.

There comes a point where inflation has to be balanced with trying not to destroy or industry, whether that be what's left of manufacturing industry or the service industry.

David, Dubai, UAE

In the 70s&80s I had an overdraft and I was paying 4% over base. My savings were also linked to the base rate . Not any more. If the Government drops the base rate there is such shortage of money that savers will require even higher interest rates. quite rightly so. cheap mortgauges are gone forever

Jim Allen, Wigan, England

Why do economists stick to discredited THEORIES? We want people to save, not take on cheap debt. That's what got us into this mess, living on money we had not got, and which has to be repaid sometime. The situation cries out for new ideas not old shibboleths.

Ridard, Chesterfield, UK

Lower mortgage & loan payments will ease the burden on heavily taxed households. This will stimulate a return to spending which will drive the economy. Gordon Brown's appointment of Peter Mandelson is proof that a new economic cycle is about to start. The driving force will be consumers and property

Abid, Shipley, UK

A rate cut in the UK will only scare savers off shore as the 'cash hoarding' banks will NOT pass it on to borrowers. The money-men are at least one step ahead of the politicians and will profit from anything governments try to do. He who pays calls the tune.

Peter, London, UK

Brillant just what we need to solve the debt crisis: More debt! Why bother, why doesn't the government cut out the middle man and just pour all those billions to taxpayers and business directly, rather than letting the banks lose it. The money just come into being by will of the treasury!.

Alan, Luton,

I don't understand why it is right to cut rates so drastically? Isn't this what caused the problem in the first place? Basically Western Society needs to be weaned off it addiction to debt. Cutting rates isn't the solution, cutting the level of indebtedness is.

Haroon Abbasi, London,

If rates fall at all it will lead to the £ falling to less than 1.5 to the $ maybe far less, the end result is a run on the £ and rates will have to rise drastically to compensate, i do wonder if the vested intrests at work understand global economics, i suspect not !!

Peter, Aldershot, UK

thanks gordon.

Albert Hall, gloucester,

Those of us who live in real free markets know that inflation is only caused by excess money supply. Therefore, given the impact of a serious lack of credit crisis, the MPC should be moving to cut rates and ease the money supply as quickly as possible.

Laith Amin, Dubai, UAE

Those of us who live in free markets know that inflation is only caused by excess money supply. In this redit crisis, the MPC should move quickly to reduce interest rates below the prevailing rate of inflation in order to ensure that sifficient liquidity is available to the struggling economy.

Laith Amin, Dubai, UAE

So let's forget inflation then, shall we?
I think the VIs want cuts. They missguidedly think that borrowing will return.
If they cut rates, myself and others will move our savings to foreign banks, and that won't help liquidity.

Np, England, UK

No, inflation is nearly 3x target, and oil prices are still way over 2007 averages. So it is dangerously easy to cut rates, & precipitate huge inflation increases. The time to cut rates is if & when inflation reduces, not before. Liquidity is another matter. Mervyn King has it about right now.

David no.2, London, UK

Oh good, to solve the problems caused over the last decade by providing cheap money, let's provide some more. Surely the best way to recapitalise the world's banks is to encourage saving, interest rate cuts will just pump more air into the bubble

Rob, London, UK

Why is it that many ordinary mortals with some common sense could see this coming and yet the majority of the MPC could not? If interest rates had been reduced earlier and liquidity boosted we would be in a mess but not such a calamitous mess.

David, London,