The Bank of England says it may have underestimated the impact of the slowdown in the housing market on consumer spending.
Governor Mervyn King said spending had fallen faster than expected and the effects of five interest rate rises may not yet have been fully felt.
On Monday interest rates were held at 4.75% but on Tuesday figures showed retail sales had dropped to their lowest for ten years.
Are you worried that Britain is heading towards a recession? Are you spending less? What should happen to interest rates? Send us your comments.
This debate is now closed. Read a selection of your comments below.
The following comments reflect the balance of opinion we have received so far:
It seems that almost everybody can forecast the country's future economic performance. Are they the same people that in 1997 were telling us that the new Labour government would be so bad for business and the economy? Remember the clever economists telling us that house prices would crash without any doubt whatsoever. They have all been proved wrong but still cannot stop spouting doom and gloom. I suppose their theory is that if they keep on long enough they are bound to be proved right one day. Let's have a bit of optimism and more positive thinking please.
Norman West, Truro UK
As every Labour government before it, this one will run out of money too. It will either have to borrow or tax in order to afford its huge public sector spending increases, which artificially grows the economy. Both of these will eventually will lead to the end of the present economic stability
No debts except for a small mortgage, a salary that covers my expenses. I'm alright it's the people who seem to think that credit is not a debt but a legitimate form of income who will suffer.
Full blown recession - I hope not - definite slow down though. Each week for several weeks there has been redundancy announcements - Abbey, IBM, Marconi, Clydesdale, P&O - someone add up the running total so far this year! Coupled with fixed and capped rate mortgages ending and going to variable rates. (not to mention the raising of exit fees on said mortgages and hardly any new mortgage not having an arrangement fee) people will feel the pinch and be less able to refinance. So many factors - hard to single out one for blame - it is what it is! (If things are so rosy why have 4 flats in my block of 8 been unlet for 6 months - at least I have peace and quiet).
All modern economies go in waves, with the troughs cleaning out the obsolete, the inefficient and the marginally profitable. Over the years, successive socialist governments (and many Tory ones too) have attempted to "flatten" this essential cycle, only to find that it costs everybody more in the long run - better to let the market go through it quickly on its own. Interference simply prolongs the pain and even worsens it.
Mark M. Newdick, Danbury, CT, USA
There is no question that we are heading towards a downturn in the UK economy. Retail sales have fallen since the beginning of April (I am in retail). There is no "feel good" factor out there in the street and a lot of negativity, and then add in the prospect of increased taxation. I would suggest that it was a good election to lose - the government is going to be on the receiving end of a lot of problems, whether or not their policies have been part of the cause.
Colin Barnes, Eastbourne, England
Is it me, or does our economy bear a strong resemblance to Japan's in the late eighties before they went into negative growth, a situation they still haven't recovered from? The BoE needs to raise interest rates and soon, to bring credit card and mortgage spending back under control. If we increase interest rates now it'll be bad, if we don't it'll be even worse later.
Alex, Aylesbury, UK
Whatever happens to the global economy I feel that at least we have a labour government who will do their best for the ordinary people of this country rather than the Tories who only look after their own.
Liz N, Oxford
I think to have better economy in Britain is to stop sending British tax payers money abroad and spend it here. They should stop all banks and loan companies advertising loans, as debt is on a sharp rise. Plus the government needs to fund health issues a lot more, rather then refusing the funding, as we all know health comes before profits.
People have got to start repaying our large consumer debt sometime. House prices do need to readjust too. On the whole however, I think the economy is strong, just in need of a cooling/readjustment period.
60% say they'll save more next year. Good intentions perhaps, but I wonder how many won't?
Paul Weaver, Twyford, Berks
I find it odd that all this recession stuff has suddenly materialised after the election. I thought we were immune to recessions thanks to our "brilliant" chancellor. The brown stuff will hit the air movement device, and Brown has known this for ages.
Gregory, B'ham UK
I am concerned that as a nation we're getting into too much debt, but people need to take personal responsibility. What happened to just saving up for something? My only real concern is that wages are not rising as fast as our taxes (particularly council tax) and house prices are way too high, as are fuel costs. No wonder we have less money to spend on goods we don't really need!
There seems to be some conflict of government advice. Should I save more for my retirement, or spend to keep the economy going?
Michael Cain, Petersfield, UK
I am honestly not bothered. I cannot afford a house of any description in Birmingham and would love there to be a crash so I can finally get on the ladder after nearly three years of waiting. Even if I did have to pay back debts, I only owe £200 on a credit card so this would not affect me either! I have never seen the point of spending like a madman then expecting to have a lifetime to pay it off. Life doesn't work like that - there is truly no such thing as a 'free lunch.'
Sara, Birmingham, UK
My god... we've got low unemployment and actual investment for a change (leave aside the argument about how well it's spent). Every year I hear 'experts' say the chancellor has got it wrong, only for him to be proven right. Have a little faith for pity sake...
A recession is inevitable, not because of poor economic management, but because economies are cyclical, bust follows boon. It could be argued that the present government have benefited more from being in power at a high in this cycle than any prudent financial management. The reality is in a global economy individual governments can do little to prevent downturns, merely try and minimise the impact and ride it out until the next high.
Graham, Stockton, UK
High taxes and inflation - a classic Old Labour legacy and look how long it took the Tories to sort the out the mess that Labour left behind in the 70s.
Max Richards, Cardiff, Wales
We have had ten years of spending in eight years. Time has come to repay those two years. Meantime, I am happily renting, and will continue to do so. This enables me to save over £100 weekly relative to what I would pay if I owned. In a recession, banks will become more cautious, and others will stop overspending. House prices will fall. Then I may buy.
Dr Bubb, London, UK
I'm the sort of nerd who pays off his (small) credit card balance every month, yet in the past five years my bank has seen fit to raise my credit limit five-fold, to £6000. If there's a debt crisis in the UK, don't blame the government!
Jim, Daventry, UK
The bad days (maybe years) are on their way! Personally I have almost rid myself of debt and will save as much as I can. The figures for unemployment are false, our country is in debt up to the neck and taxes will rise inexorably. The Labour Party will have to face the music on this and we are in a terrible position with industry almost gone and no manufacturing base to speak of. Put another notch in your belts everyone!
Gill Chesney-Green, Gotham, Notts
Gill Chesney-Green, Gotham, Notts. No manufacturing base? What about Honda, Nissan, Toyota, & Ford (vans)? What about Rolls-Royce's aircraft engine factory (currently working flat out to make engines for the new airbus)? Britain still makes world class products better than anyone else.
No I'm not worried. The ludicrous cost of living, especially housing, in the UK was one of the factors why I left Britain. If it were possible to own my own home I may possibly have stayed. At least in Australia the cost of a home is related to earnings! There is also some primary industry left here - when the credit card spending stops the economy doesn't have to!
Dan, Adelaide, Australia (ex-UK)
I am sure the loan ads on TV will help if we go into a recession, they seem to be the answer for everything, buy now pay later. They are the reason why we going into a recession, they make it seem so easy.
What a bunch of doom-laden people you are! All economies have to weather gales - just like a ship and just like a ship they do not sink easily. It's okay. Stop worrying. The economy is fine. You should always be financially prudent anyway - not spend like there's no tomorrow. My view is that most of you cannot believe something so good can last (ie the boom-bust mentality) so you all start expecting the worst. Thing is not to talk yourself into a recession by overreacting to blips.
Dave Deacon, Liverpool, England
I wonder how much effect the internet and eBay has had on consumer spending. Practically everyone I know now buys high value goods through these channels. A few years ago we would have been forced to buy these items new.
We've all had a merry credit-fuelled dance for the last eight years (including the government with borrowings that are sky-high). Now comes the time to pay the piper.
Suzanne Hudson, Leeds, UK
Labour has stayed in power by bringing interest rates to artificially low levels. This has caused an unprecedented rise in house prices and a trillion pounds of personal debt, both of which are unsustainable. It has also allowed them to raise taxes at an alarming rate. Real inflation has probably been running at about 10% if you include council taxes, fuel, transport costs etc. The party is over.
Russell, Midhurst, UK
I've been worried about it for years, and for the first time in the 20 years I've been running a company, I've been unable to pay my tax on time. Tony Blair must be congratulated; he couldn't have timed the election any better. The only good news is that New Labour can't blame anyone else this time - well they will, but only Socialists will believe them.
Labour has ridden on the back of Tory success for the last eight years. Not for much longer, low interest rates, high debt and where has it got us all! The future seems gloomy, there is hardly any industry left, IT is moving to India. We are no longer Great Britain. We are on the verge of losing everything our forefathers created. I feel sorry for all you Labourites who can't see what is coming. No wonder Tony Blair keeps smiling, he's just thinking "suckers"!
Kaz, Bham, England
If my partner and I had attempted to borrow and spend our business out of the 1990s recession, this would have merely staved off trouble for a time - until the false boom we'd created collapsed around our ears and with it the business and many people's jobs.
We took the opposite course and cut back our costs, my partner and I reduced our pay and budgets and used much of the cash reserves buffer we'd saved for just this event. We survived, just. What will Chancellor Brown cut and how will he get us through this coming recession when he's already spent, not just our vital reserves, but those we haven't even earned yet?
Colleen Morrison, Harlow, England
I've been waiting so long for house prices to crash, but all the while the prices keep going up! Can't wait anymore. Going to take the plunge and get on the housing ladder.
I think we could well be on the way to a recession. Everyone knows it's been coming, as the economy is renowned for having peaks and troughs, I feel sorry for those people who have re-mortgaged to the hilt or paid over inflated prices on their houses. Ignorance is bliss.
Graham Smith, St Helens, UK
If you're not worried then you should be. A world recession is just around the corner.
Abraham, Vancouver, Canada
Falling high street sales, job losses by the thousand, record levels of debt, rising oil prices, rising inflation, rising interest rates, falling house prices, rising taxes and a Labour government. If it looks like a recession and sounds like a recession then the chances are that it is a recession.
The price of oil is set to skyrocket. Everything we buy in the UK is tied to the price of oil - everything. We are about to see inflation like nobody's business. Why do you think Blair was so keen to try to secure access to what little oil is left?
Mark, Cardiff, Wales
I'm more worried about the state of the planet's ecology, ultimately more important than money and a primary influence on economic trends. If the stock markets collapse, the only thing that worries me is that I'll be left in a society that has long forgotten how to live in harmony with the planet and will probably result in complete societal collapse.
As a saver, I don't see why I should be penalised for the reckless borrowings of others. Interest rates need to rise, savers are being hit hard with after-tax interest rates below real inflation.
Malcolm, Somerset, UK
So, we're not filling up our credit cards on the high street - about time too! But we've still got almost full employment, low inflation and a strong pound, so a bit of perspective would be nice before people go whinging about a recession - or at least remember what a proper recession is like!
Jo, London, UK
The only reason a recession has not yet come under the Blair government, is because the borrowing laws have been relaxed. Everyone borrows, with the false impression the economy is sound, unfortunately we have to pay back what we've borrowed and this will mean a nasty recession, perhaps leading to long depression.
Not a recession, more of a gentle downturn thanks to a well managed economy that is well placed to resist the undulations of the financial markets. If you have a sensible mortgage, sensible credit card bills and spend sensibly you'll be ok. If you don't, that's your problem
Tony, Bognor Regis
As resource costs (especially oil) head skywards permanently now that China has entered the capitalist fray then it is inevitable that the economy of the UK (which produces nothing but consumes huge amounts) will come crashing down. It is time to become more self reliant and look to local goods and produce because very soon it will cost too much to import food from thousands of miles away. This is the beginning of the end for the so-called global economy!
Fergie Meek, Killin, Scotland
We've been storing up problems for years now. The consumer boom is petering out, and the increased bureaucracy and regulation introduced by this government are making us less competitive. China is hoovering up manufacturing, and India is hoovering up IT and financial services and call centre jobs. Our economic future depends on engineering and science and yet students are heading for media studies instead. We will be in serious trouble if we do not take action now and respond effectively to increased global competition.
L Goodwin, Slough, England
Everyone is to blame here. We spend too much, borrow too much, want everything for nothing and moan when taxes are raised to pay for everything we wanted for nothing - and then blame everything on the government when it all goes pear-shaped.
Recession is inevitable. We do not make, grow or mine things anymore. The balance of payments deficit proves this. In general we import goods and sell services, mainly to each other. Recession must follow once the country has used up its capital and its credit.
N J, Cambridge, England
The UK consumer, buried in debt, living in the most overpriced economy in the world, and in a marketplace where credit is far too easily available, has at last been forced into voting with his wallet.
Michael V. Porrelli, Norbiton, England
My mortgage has gone up, my council tax has gone up, my national insurance has gone up. Of course I am not spending! In fact I probably won't start buying anything more than necessities until interest rates drop back to about 4%. Why are our rates more than double Europe and America?
What goes around comes around. This consumerist society that gets its quick 'happy buzz' from filling wardrobes full of clothes that are rarely worn and parking yet another car outside the drive to aid taking the kiddies 100 yards to school deserves what's coming. The future belongs to the self reliant - I'm looking forward to it.
Paul, Manchester, England
The interest rates should rise, not fall. This country and its people are already heavily in debt (thanks to the so called brilliant chancellor). Any falls in interest rates will only cause people to spend more money which they don't have AND allow the already greedy sellers/estate agents to hike up the property prices. Both of which may sound good in the short term, but will end in tears in the long term. If I heard the news correctly, the retail sector was complaining that it was making LESS profit. That means they are still making money, but not as much as they want to.
Sanjay, London, UK
Recessions are simply part of the ebb and flow of any economy. It is always convenient to blame the politicians for the latest recession, however recessions have been happening on an almost monotonous basis for the last 150 years (there have been 32 peaks and troughs since 1857). I believe a well managed economy is not recession free, rather it is able to minimise the impact of them when they do happen. They can certainly be made worse by unnecessarily depressing consumer confidence with predictions of economic failure. As the Scouts would say "Be Prepared"
David, Bracknell, Berkshire
Based on my own experiences, I wouldn't say that the country is heading for recession. However, I am worried that, if the media pundits continue to raise these concerns, they might end up talking us into one. A little responsibility, please!
I admit I am starting to worry about the economy. Many shops are closing, retail sales are down and I daren't buy a house in case the market collapses. I worry that the country is spending way too much, and think we should scale back on public spending for a while.
Tony S, UK
If you look at history the economy goes up and down it is part of the system we live under the only way to stop it is to change the system.
Adrian Cannon, Edinburgh Scotland
The great economist Hayek taught us that as night follows day, recessions follow booms. They're the price we pay for getting greedy and investing in things you wouldn't have touched in the past. Imagine borrowing £150k to buy houses in Wales? You get what you deserve in this life. First you got a Labour government. Now you're going to get recession.
Can't see how we can blame the government for the fact that so many people are living way beyond they're means, the level of personal debt in this country is unbelievable. We are a nation of whingers basically, if it does go belly up, we need to take personal responsibility (no one forced you to buy that plasma screen, new car etc) I remember the last recession, and nobody in my street starved to death, so let's keep our perspective!
Ed Williams, Eastbourne, UK
I hear a lot about the state of the economy being strong, and how Labour have made such a success of our economy. But I ask the question - at what cost? When Labour took over running the country from the Tories, they inherited a treasury which was bursting at the seems with cash. After 7 years in power, they have managed to run this dry and are now in debt. This is no way to define successful economic performance. If I did the same with my finances, I would have the bailiffs at my doorstep. Just as well the government can just "extend" their "public borrowing" every time they mess up the finances of the country!
Faz M, London
Many on here are fooling themselves if they think the government of the day can do much to affect the global economy. Labour made a good move when putting interest rate control outside of the political process - this has helped. Labour has presided over a strong economy for a long time, though any economist will tell you, these things go in cycles. Because of the careful control and forward planning of interest rates the peaks and troughs will be less severe than boom/bust caused by Thatcher/Major governments. I doubt the Conservatives would have taken back control of interest rates, they would have taken money out of the economy by cutting back on pubic spending (job cuts), but put some back by cutting taxes, so the outcome would probably be similar whoever won the election.
KP, West Midlands
Labour have been busy selling off future assets like our hospitals & schools (through PFI) and our state and private pensions (through Brown's huge yearly tax raid), so that they can spend tomorrow's money today and claim that the economy is strong. Wake up Britain! Labour are selling us all a con. We live in a soviet-style economy where our tax money goes straight into the pockets of public sector workers doing worthless jobs designed to spirit them off the unemployment figures, instead of being spent on our schools & hospitals etc.
Paul, London, UK
We've lost many jobs from the wealth creation side of the economy under Labour, which Brown has 'hidden' by increasing the public sector employment numbers by 850,000. Most of these are not wealth creating and productive; they need the private sector's taxes to be sustainable. If the economy does stall or go into recession I suspect the chickens are about to come home to roost for Labour's profligate waste of tax payers money
John, Northwich, UK
Of course retail sales are down. People are spending all their money trying to get on the housing ladder and then paying huge council tax bills. If the government takes all our money how is businesses supposed survive on the pennies that are left? The government won't be able to blame the coming recession on anyone.
Andrew, Cardiff, UK
One of the reasons why the economy is strong is because so many people have borrowed ridiculous amounts of money. But with the amount of people being laid off recently (IBM, Rover etc) I just hope this isn't a trigger for a recession.
There is no incentive to save at present. So I'd like to see interests rates move up to nearer 6-8%. This would also assist the older generation who have seen their savings whittle away. Bit more long term prudence and less short term greed. Plus I wouldn't think about changing house right now as you could be left with serious negative equity in due course.
KayBee, Angus, Scotland
Britain will be in recession by summer 2007. The irony is that the Labour government have taken us through the same boom and bust cycle as the Conservatives did in the 1980s, just by a different route. Enjoy it while it lasts - the second half of the decade will be a hard slog.
David, Cambridge, UK.
This is the end result of Gordon Brown's stealth wealth policies. Instead of the recession we faced in 2000 we now get a bigger one with massive debt and housing bubbles thrown in for good measure. Some economic miracle!
Michael, Edinburgh, UK
I own an IT Services company, and the economy in our sector of the market is doing very well indeed. We have grown turnover by over 30% in the last 12 months, and will do the same again next year. The only thing that's slowing our growth is the ability to recruit and integrate new employees.
The false belief that when the rich go bust, the poor will be able to afford more housing is sillier than the belief that the market won't go bust. In fact, since 1999, when the FTSE and Dow Jones first started a nose dive, companies like Google, eBay and my own smaller electronic business, had first started to pick up speed; the rich are not losing their money to the poor, but to the neo-rich (that's one step further into history than the 'nouveau rich' of the eighties). Rich and poor alike ought to be afraid of their new financial dictators. None of you are going to get off lightly.
Economy going into recession, over taxation, over regulation, businesses relocating abroad. Yes I am worried; that was why I voted Conservative.
Gary, Longthorpe, England
Does this High Street spending include internet sales? I bet that web based retailers are still doing well, despite traditional retailers reporting drops in sales figures.
It's funny that all these people probably voted for labour because of their "excellent economic achievements" and here we are on the brink of another recession. Irony doesn't quite do it justice.
How can a country which continually allows its manufacturing facilities to close down have a great economy? People are up to their neck in debt because the government have not implemented controls over borrowing. When all this debt has to be repaid where is the money coming from? Wages are not in line with borrowing so the whole thing is going to go belly up pretty soon. I just hope I don't end up working in a bloody call centre.
I've seen it happen here in Holland, and unfortunately also been caught up in it in more ways than one. House prices were extremely high before recession hit, yet many like myself have lost 10-20% or more on what they paid and face being stuck with properties they can't sell. Despite the fact that redundancy requires a court order here (the sack doesn't exist) I have had many friends who have had to face this since recession hit, it's also quite worrying to see the million square meters of empty office space here in Amsterdam that is still not filled, since so many foreign businesses had to move away from Holland. The worst thing is the recession itself was caused by the economy being too good, and people got too greedy. The same thing will happen in the UK, it's just a matter of time.
Jennifer, Netherlands, ex-UK
We have been in a recession for some time; I do not understand why no one has seen it. Unfortunately, another 5 years of this Government will make things very much worse. I predict a return to the late 1970's "Winter of Discontent".
You bet! I've seen this coming for over a year and a half. Since January, business has been bad, April was a little better but I'm still spending carefully and I'm not in debt! So all you greedy 'property types' and 'credit-card junkies' who spend beyond your means, your come-uppance is well on its way but we'll all end up paying for it in the long run.
I think we are about to reach a tipping point. High fuel costs, high levels of borrowing, saturated housing market, can only point to difficult times ahead. If unemployment starts to rise I suspect the problem of economic migrants will disappear anyway.
Julian, Cardiff, Wales
This could only have been expected. With house inflation at such a hyper rate, and currently uncontrollable, people will just not have enough real cash to spend in the shops. Only credit will be available and that will ever deepen the economic collapse.
Sooner or later we will have to pay for the apparent prosperity that many of us in the UK - but by no means all - have experienced over the last 15-10 years. The longer we go on pretending that we are well off, mostly due to hugely inflated housing prices and high levels of personal debt, the worse the crunch will be when it comes.
Edwood, Malvern UK
I tried to help the economy by single handily fuelling a consumer spending spree (my personal debt is now £30,500 ) but it all appeared to be in vain as I am being told that the economy is on the wane. Maybe if I could only apply for some more credit cards I could try harder!
Mark Dowle, Abingdon, Oxon
Quite frankly it doesn't bother me in the slightest if all those who have chosen to live way beyond their means using cheap credit to fund it, find themselves in trouble if there is a recession. Living beyond your means is almost always a recipe for financial disaster
Jane Black, UK
Here in Ireland, as in the UK, we continue to believe that our economy is strong. In reality, if citizens, young and old, had to repay their debts on credit cards, loans, mortgages etc, the whole country would go belly up. I am surprised Ireland is seen as the model economy by the new EU countries. I really hope they will not follow this example!
Whilst realising that "services" now keep the country going, with manufacturing industry accounting for only about 17% of GDP I have never fully understood how the economy manages to fly anyway. We must have to render a heck of a lot of service to pay for all the imports. So the news that the economy might be set to plummet comes as no surprise to us innumerate sceptics.
Mike Bettney, Long Eaton, UK
With consumer debt at such high levels, high street spending was bound to be affected sooner or later. Likewise, property prices have reached unsustainable levels. Whether this will lead to a recession or just a slow down remains to be seen, but either way Gordon Brown will soon be looking at a huge budget deficit. I'm bracing myself for the inevitable National Insurance rise, but the effect this will have on businesses could be what will trigger a big recession.
Ian, Edinburgh, UK
Yes I am worried! The economy is based on people borrowing money so they can buy goods from abroad. Eventually, loans will have to be repaid and foreign countries will want paying for all of our imports.
Stuart Allen, Killamarsh, UK
I'm not worried about a recession. What I am worried about is how the Government are encouraging us all to save, yet big businesses are encouraging the Bank of England to draw the interest rates down in order to encourage us to spend. Who exactly is running this country?
Sadly we can't have our cake without paying for it and we must now deal with massive consumer debt, job losses, mass unemployment as well as saving for our pensions. I bet the Tories are glad they lost the election.
Di Drinkwater, Oldham UK
Currently I have family that can't sell their house, even at reduced prices in a sought after area, and builder friends who are now quoting but getting no orders. The spending spree is over. Hold on tight!
Richard, Worcs, UK
Yes there has been a slowdown - but jobs are key to whether the economy will fail. If jobs start to go that's when we're in real danger of recession. Not just the Rovers - there's actually a lack of skilled manufacturing expertise in this country - but look for city loses etc. Consumer spending was at unsustainable levels and the rate hike has done its job. I'm sure the Bank of England will watch the economy carefully and lower rates when necessary. There may also be house price stagnation - or even a house price drop. However I would be shocked if there is a crash just because there are so many first time buyers waiting to get on the ladder.
There is not going to be a recession, what you see now is the natural cooling because of sustained interest rates at this level - exactly what the Bank of England predicted. If we were to drop interest rates now, the housing market would explode because of increased demand, then we would be in serious trouble. Anyway, just thank your lucky stars you don't live in the Euro zone with growth less than 1% and falling (IMF figure) and unemployment at 12% and rising. That's what you call a recession.
All the indicators are pointing to a recession, which, when coupled with Mr Brown's overly optimistic figures for economic growth in the coming years means only one thing, higher taxes for all of us to pay for Labour's spending plans.
Paul Stvenson, Hemel Hempstead, Herts, England
I'd have been more worried if the recession prone Tories had got in last week!
Russell Kennedy, Chelmsford. England
Officially inflation is around 1.5%, so salaries go up by about 1.5% annually. But council tax rises at around 10% annually, the congestion charge is about to rise 60% in one go, the price of fuel (electricity, gas, petrol) has risen 7% in the last three months and so on. All it will take is a blip in the economy and those who have maxed out their mortgage, equity release, credit cards and overdrafts will be against the wall. I won't be badly affected - I've chosen to run a 10-year-old car rather than a gleaming new Mercedes and put the savings into clearing my mortgage. After less than six years I just got a letter from my bank warning me that my offset balance was bigger than my mortgage so I should take some money out.
I've got young kids - my biggest expense by far is childcare. Short of calling an orphanage, there isn't a lot I can do to cut that cost.
Andrew, Malvern, UK
Come on, what are you worrying about? Gordon Brown has ended "Tory boom and bust".
Dave, Sheffield, UK
I am worried about the economy. Interest rates staying put or falling, whilst desirable for industry, are part of the problem in fuelling the debt that people take on. My biggest fear is a hike in interest rates, leaving people struggling to pay mortgages, and outstanding debts. Bankruptcy and increasing reliance on the state will then impact the economy further.
Andrea, Bordon, UK
Not content with failing to bring the government down over Iraq, the media now tries to talk us into a recession, hoping it will do the job. Personally, I've never had it so good! The Bank of England will ensure there is no such recession, despite the media's best efforts.
Francis Anderson, Reading, UK
All this talk of a downturn might just be HMG's way of encouraging us to start saving a bit! And why is a retail slowdown always interpreted as a 'lack of consumer confidence'? Perhaps there's just nothing out there worth buying at the moment! Perhaps, heaven forbid, we're all happy with the things we bought last month.
Candy Spillard, York, UK
As your intro says, interest rates are forecast to fall - making mortgages cheaper and helping business - not things normally associated with the start of a recession. Meanwhile economic growth continues strongly and is forecast (by the Economist magazine) as 2.5% for 2005 and 2.2% for 2006. None of that spells "recession" -which is normally defined as 3 consecutive quarters of negative growth. Britain is a long way from the double digit interest rates, economic contraction and negative equity of 1990-91! Let's not talk it down.
Chris C, London
I run a small business. Year on year we have made economies wherever possible so as to try and maintain profitability. During that time every overhead outside our control (power bills, business rates, wages) have increased by many times more than the rate of inflation. There is no more fat to cut away. What does Mr Blair suggest we do now?
Patrick, Honiton, UK
The economy will slow down the housing market has slowed down, however people are still in jobs earning good money there will be no recession.
The economic cycle which has been steadily rising over the last 12 years has peaked and is on the way down. World demand has been satisfied in many areas and energy which is the engine of the global economy has risen by three times in two years. I believe we are in for a steady recession over the next 5 to 8 years. This will hit the service economy very hard and knock onto employment and house prices. All those spending promises and predictions made at the election now look to be pie in the sky.
Keith, Rayleigh, England
We have The Rt Hon Mr Gordon Brown MP as chancellor. I worry less because his expertise is what Britain needs all of the time.
Rob Bluck, Birmingham, UK
I'm a little worried, there have been a number of redundancies in the city, they have been kept very low key, which may be the start of a trend. I think all sectors, including the public sector, will be hit. Savings are a must to survive in tact.
Sinead, London, England
I believe we are on the slippery slope to a recession. House prices are falling, retail outlets are struggling and every day another company announces redundancies and yet Blair was still voted back in! It's time he reaped what he sowed, but unfortunately at the country's and tax payers' expense.
There can be no doubt that this country is heading into recession. All the signs are there - of course this government doesn't have recessions, just "economic downturns". Personally I'm lucky, no mortgage and property paid for but I do pity those who are going to find themselves in the old style equity trap.
Terry, Epsom, Surrey, England
I'm not so much worried about a recession as resigned to it. There have been so many signs for a couple of years now that it was coming. At least the boom-bust cycle has been broken, there was no boom this time!
Tim, Fareham, UK
I think we'll see a slight loss of growth but not a recession proper. House prices may come down which might give people jitters, but prices need to fall they're at silly levels.
Daniel S, Notts, UK
Inflation is at 1.9% or 3.5% depending on your choice of index. Government spending is increasing at 7%. It doesn't take an economics degree to work out that is unsustainable. The pre-election boom is over, something's got to give sooner or later.
Brian W, Chelmsford, UK
I have been waiting for the housing market to crash for a couple of years so I can afford to move and get more house for the extra money I put in. It must surely crash sometime.
I'm not worried that we are due for a recession - the economy is broadly pretty strong. However, I AM worried about the media spooking us into one. The more conjecture about it, the more the prophecy becomes self-fulfilling.
Colin, London, UK
Yes I am very worried about the economy, Rover, Jaguar, Peugeot and Marconi are all closing down or laying off workers by the thousands...
The government has been fiddling the statistics for many years. Inflation is supposed to be around the 2-3% mark, but it has been fiddled, house prices and council tax are not included and cheaper DVD's cancel out rising food prices! The economy has been running on debt for many years, and now it is pay back time. We could be seeing the biggest recession ever coming up.
Kirt Wakefield, Swindon, UK
No of course I'm not worried about the economy. I'm a civil servant with a guaranteed job and a cast-iron, copper-bottomed final salary pension, safer still with a re-elected Labour government. When all the private sector jobs start going, I'll still be here, safe as houses.
A.R., London UK
Ironic, isn't it that Labour campaigned on the basis on the economy, and now the election has been won the economy is tanking? I hate to say "I told you so" - but I will, and I did. But we now have 5 years of stifling regulation, stupid policies and union rule. So well done to all those Labour voters!
Russell Long, UK
Economics seem to go in cycles. We seem to be heading for a downturn. I'm battening down the hatches financially to make sure I can weather any event the best I can. It's hard to predict the level of downturn; my guess is it'll really affect all those with high mortgages, credit cards and loans.
Roland Bone, Stirling, Scotland