Chris of Singapore, manufacturing is not the only industrial sector that depends on exports. The UK has a strong export market in all manner of goods and services, which will all benefit from a weaker sterling.

Bob, London,

When I bought my first house on a 99% mgage in 1985 the base rate was 14% and it stayed that way till dropping in 1992 (rough figures ok). Well houses still went up in price, borrowing was easy, I survived, I found work easily...so now as a saver let's have base rates up there again please!

Nigel, Lincoln,

Please remember that growth forecast (-.1%) can be too optimistic as well as too pessimistic.

John Wood, Hull, UK

The ultimate in self deception. The housing market - 15% more fall to come? - is paralysed despite £200 billion BoE backing. Then our exports will increase with a weak pound eill they? Since the EU (50% of our exports) will apparently get worse , this seems improbable.

christina Speight, london, UK

Your reasoning is incomplete, Mr Kaletsky. The euro is swiftly losing ground against the US Dollar. Moreover, the ECB's interest rate policy is more damaging to the South than it is to Germany. Any export boom in the UK is also unlikely if Europe (its main export partner) is in deep recession.

Daquan Quartermaine, Middelburg, Netherlands

This is the ultimate in self-deception! There is nothing here recognisable in the real world where the housing market wsill get worse not better - probably another 15% fall ahead. The idea that experts will increase when the EU's position - 50% of our exports - will get worse is ludicrous

christina Speight, london,

The vested interests in the housing market have tried to convince us that we rely on overinflated property prices. Actually we need to rely on our skills and products sold in the international marketplace, not some property cash machine based on the bad practice of banks. Can we make the transition?

Rob H, London,

"just 0.1 per cent - as to be almost irrelevant, especially in a forecast where the margin of error is huge."

Sir, may I please point out that your "huge" margin of error may equally leave us much further on the downside. Given the recent trend in all matters economic , I fear the worst.

Conor , Doire,

The government never said that it's objective was to support the housing market. Period. This is a fiction of jittery middle-aged home owners living inside their pension.

JT, London,

Explain me why "reviving" the housing market would help in any way the real economy (an attempt at sustaining an asset bubble). None has ever demonstraed that house market prices afect the economy. Germany is close to recession and never had housing boom. Spain has a slump and is still growing 1.2%

Mark, canterbury,

I agree with David Martin. Anatole, whilst always optimistic, is consistently wrong. He is doing his usual trick of comparing a forward looking forecast to the current circumstances.

The credit crunch will lead to banks writing off a minimum of $1.5 trillion. We are at about $400 billion so far.

Jon Pratt, Reading, UK

I am surprised by the cynics stating "The UK does not manufacture anything" What crap.The UK has a large aerospace & arnaments industry and we are producing more cars now than 20 years ago. All Western nations have suffered a dowturn in manufacturing due to competition from China low cost labour.

Bill Rees, Truro, UK

BofE allowing more credit doesn't solve the problem long term. The economy distorted by a property bubble may recover when other activity grows...and that will take a long long time. Otherwise we lurch from property boom to slump forever!

Peter, London, England

Mr. Kaletsky please remind me of the famous product the UK is internationally known for ?!

George, London,

A remarkable upbeat forecast on an economy reliant on house price inflation and financial services coupled with a government spending crisis. However I do agree on one thing this is an opportunity to rebuild an economy based on selling houses to each other for increasing amounts of debt.

david barker, eastbourne,

>>>A low pound will stimulate shift from europe to uk factories
Matt , Swansea<<<

...by the time production costs in the UK are lower than in Romania, or UK products are more competitive than German designs.

AK: Does that mean it will all be over by x-mas? Again?

Sven, Germany, Europe

I may be being naive, but the article refers to "exports", not manufacturing. We do offer services abroad. The various mentions of "manufacturing" in the comments do seem to expose negative thinking (apologies in advance to all those concerned).

Ross, Herts,

Very confused argument. The US economy is in recession when exports are stripped out. These exports have been to economies that are lagging the US (growth wise) but are now showing signs of serious slowdown. So Kaletsky figures that moribund consumer demand in the US and the EU will help UK exports!

David, London,

A simple way to stop the housing market plummeting is to follow Australia's lead and have sale contracts that are unconditional after say 3 weeks, giving the purchaser time to complete their due diligence and the vendor confidence they will not be strung out for months by gazundering.

Michael, London, UK

As our banks are on their kness how will they help reflate the economy? The banks continue to restrict lending. The savings rate is minimal and consumers are over leveraged; a deadly cocktail. The City is in turmoil. House prices are crashing. It's a bear market!

Simon, Harrogate, uk

Thanks for your assessment
No manufacturing base?
Doesn't the UK currently produce more cars per year than at any other time? The companies making them may not be british owned, but their export contributes to the balance of payments. A low pound will stimulate shift from europe to uk factories

Matt , Swansea,

You were spot on last year with your prediction of the effect of the US government stimulus package, which is currently benefiting that country's growth.
I hope you get this one right too.

Matt, Swansea, UK

Any devaluation whether intentional or just by market forces will lead to higher inflation. Using this as a safety tool is only false!

Richard, Plymouth,

Should not Economists' opinions be put on the same page as astrologers and weather forecasters? I am sick of reading their differing and carefully conditional predictions. When I want to know what's going to happen with the economy I might as well step into a taxi.

Kevin Straw, Leicester,

Unfortunately Britain isn't America and won't benefit from a weaking currency. Here's why
Britain doesn't have a manufacturing base comparable to the US and exports are therefore not as sensitive to currency weakness.
Second, the US weakened at a time global growth was still robust

chris, Singapore, Singpore

A remarkably bullish assessment Mr Kaletsky. However you underestimate the ability of our Central Bank to 'do nothing' and still keep their jobs. The US has kept business oiled throughout this crisis with low interest rates and foresight. By comparison our leaders tell us what just became apparent

Will, Lincoln, UK

a few thoughts on this.

The US$ was weak for 5 years before the current export boom got under way.

The UK doesn't make anything to export.

Who would buy these mythical exports? A stalling Europe? a slowing US? Asia, the lowest cost manufacturers in the world?

Giles, Singapore, Singapore

Agree with C. Grant (Montreal). Common sense spoken in the press at last. Look at the components of the Eurozone - the only strong one (and this is weakening rapidly) is Germany. A large number of the countries are already in recession, and the strong Euro will not help recovery.

Peter, Guildford,

What is most amazing about the whole credit crisis, which has increased the speed of the downturn, is the poor judgement of the educated, intelligent, highly paid people, who manage the banks, financial intermediaries and regulatory bodies. Where is the accountability?

Tim Wilkinson, Beijing, China

I disagree.

This isn't the end... or the beginning of the end. It's the end of the beginning.

Peter, Lancaster,

At last some sense in the media. The UK has an amazing ability to talk itself down. (Will city bankers do anything to get a reduction in rates?) Given the problems in the EU why has the pound been under such attack? I guess it is an easy target for the speculators.

C Grant, Montreal, Canada

The only way is up for inflation or interest rates. The banks have know this crash was going to happen for a while but were locked in a race for market share with each other. A well known high street bank has been selling off and renting back its premises over the last three years.

john, weybridge,

If we consider an export driven up turn based on a weak pound,Do we still have a manufacturing base to take advantage.basically do we still manufacture anything in enough volume.

david, bournemouth, uk

Leveraging is unsustainably high - the 60:1 of the average bank means any default wipes out their capital.
The only thing keeping it afloat is BOE swaps for worthless loans - and that stops in October.
If Anatole had placed money on his previous forecasts, he would be bankrupt.

David Martin, Bristol, UK

Quote from the previous post: This will lead to the usual phenomena of the 1970s -- a wage spiral and strikes -- and to higher interest rates.

I don't agree. Trade unions barely exist any more, and the supply of labour is higher than demand. There is no bargaining room for workers therefore!

Peter, Liverpool, UK

I am not convinced. America is a much more closed economy than the UK, for we are heavily tied into the euro-zone. A weak pound may help exports but it will be highly inflationary. This will lead to the usual phenomena of the 1970s -- a wage spiral and strikes -- and to higher interest rates.

Martyn, London,

Anatole - I share your views.

Excluding economics the main difference between the UK and other leading economies is the degree of pessimism shown by the respective leaders. The comments by our chancellor have been far more damaging than any OECD forecast - we need a return to positive thinking.

Mark, Bristol,