The key question remains – will governments run out of weapons to boost the economy in 2009?

Gazing into a crystal ball has never been quite this tricky, and perhaps the most accurate prediction from industry experts is that policymakers will likely find themselves strapped for more tools to combat the crisis.

To the average citizen, sophisticated financial gadgetry will not alleviate fears of rising unemployment levels and inflation worries. Borrowing costs for those whose home equity and other floating-rate loans are tied to the prime interest rate may have seen some relief from rate cuts, but the gain has been negligible for others.

Early this month, the IMF’s chief economist Olivier Blanchard opined that the host of government rescue measures may have brought global economies back from the brink of the worst financial catastrophe in more than 60 years, but did not remove it from the danger zone. Progress had been made, he conceded, but insisted it was “much too early to declare a victory.”

On November 6, the IMF cut its world growth projections to a mere 2.2 percent, emphasising the need for an immediate fiscal stimulus. “At this point, the goal should be fiscal boost of about 2 percent of global GDP,” said Blanchard. He remained optimistic that this would translate into a corresponding 2 percent increase in global growth.

Two weeks ago, Bank of England Deputy Governor Charles Bean said zero interest rates were a future possibility for Britain. Both the Fed and the Bank of Japan have adopted a near zero interest rate policy, with the former stating a willingness to keep rates low for an extended period.

It is worth noting however, that the co-ordinated round of rate cuts by central banks worldwide in October did not have the desired immediate impact on the state of the financial system.

Until market risk aversion eases, lowered interest rates may not impact the economy to the extent that governments would like. Additionally, as banks further their attempts to deleverage, we may very well see small bursts of stability, but a period of sustained growth seems unlikely to return in 2009.

In the interim however, we can certainly hope that some confidence is returned to both frazzled consumers and strained financial markets alike. And while extensive borrowing and emergency measures will increase countries’ debt, shoring up resources to prop up the global economy is set to be the overriding priority for a long time to come.

This week, the all-important services sector (which makes up three quarters of economic output) recorded its weakest headline index since 1996 and seventh straight month of contraction. Together with dismal news on unemployment and inflation, these surveys confirm that recession is spiralling as we reach the close of 2008.

So was the rate cut enough?

The consensus among economists polled by Reuters was indeed for a full point drop, bringing the base rate to the lowest in more than half a century after the big 1-1/2 point cut last month.

But several economists had pushed for a 1-1/2 point cut and some even thought the economic situation is dire enough to warrant zero percent.

Do you think the Bank should have been bolder?

(Please note this is an updated version of an earlier Have Your Say which asked readers how big a rate cut they thought the Bank of England should make. The announcement was made at mid-day GMT)

This week, the all-important services sector (which makes up three quarters of economic output) recorded its weakest headline index since 1996 and seventh straight month of contraction. Together with dismal news on unemployment and inflation, these surveys confirm that recession is spiralling as we reach the close of 2008.

So was the rate cut enough?

The consensus among economists polled by Reuters was indeed for a full point drop, bringing the base rate to the lowest in more than half a century after the big 1-1/2 point cut last month.

But several economists had pushed for a 1-1/2 point cut and some even thought the economic situation is dire enough to warrant zero percent.

Do you think the Bank should have been bolder?

(Please note this is an updated version of an earlier Have Your Say which asked readers how big a rate cut they thought the Bank of England should make. The announcement was made at mid-day GMT)

More crucially, both Chancellor Alistair Darling and Prime Minister Gordon Brown have sought inspiration from revered economist Maynard Keynes' oft-cited advice - spend and spend some more to fight off the ill effects of an economic slump. Keynesian theory's greatest principle is the fundamental concept of the circular flow of money. He opined that when individuals rein in money outflow, the government needs to be "priming the pump".

Brown and Darling insist that we may very well fall prey to a vicious circle if we curb spending - most people hoard money in turbulent times, but times become even more difficult when we're tight with money. Whether this theory will work remains to be seen.

In November's pre-budget report, Darling is expected to announce an easing of fiscal rules and outline plans for priority and targeted spending on infrastructural projects. "What I want to avoid is getting ourselves in a position governments have done in the past, where you face an immediate problem and cut back on the things the country will need in the future ... ," says the Chancellor.

Close on the heels of his declaration comes U.S. Federal Reserve Chairman Ben Bernanke's statement to Congress supporting the idea of a second wave of spending. Gearing up for Round Two in the feverish economy rescue battle no doubt.

Could fast-tracking future governmental spending plans provide a fillip to productivity and create job opportunities at a time when forecasts peg the unemployment figure to hit 2 million by end-2008? While staving off unemployment won't hold good as a sole justification in light of a worrying debt-to-national income-ratio, expanding money supply can put a little power back in the hands of people. Might it restore some strength to the fragile confidence of today's fraught consumer? What do you think?

The six major energy suppliers will contribute to a one billion pound, three-year energy-saving initiative -- but will not face a windfall tax on their profits.

Pensioners and people on low incomes or benefits will receive free loft and cavity wall insulation, while others will receive a 50 percent discount. The government says 12 million elderly households will benefit from the plan this Winter. 

Other measures include:

* A freeze on this year's bills for 500,000 poor customers

* Partial reversal of the cut to the warm front programme giving free central heating to poorest pensioners

* Cold weather payments to go up from £8.50 a week to £25 a week for pensioners, the disabled and families with children under five - if temperatures drop below zero for seven consecutive days

Do you think it is enough? Would a windfall tax have been better? 
 

Inflation currently stands at more than double the central bank's 2 percent target but any rise in rates to try to choke that off risks aggravating the overall economic slowdown caused by the credit crunch.

Firmly impaled on the horns of a dilemma, most of the the nine-member Monetary Policy Committee, including Bank Governor Mervyn King, thought no change was the best option, given the risks.

What would you have done?

With growth in the services and manufacturing sectors equalling the dismal figures of 2005 and interest rate futures rising, it's a double whammy, hitting both our pockets and, some would say, our morale.

At the same time, inflation currently stands at more than twice the central bank's 2 percent target, hampering the Bank of England's ability to boost growth by bringing down interest rates.

Most analysts do expect it to cut rates and some predict a move before Christmas. Others say it will have to wait longer.

Do you think the Bank needs to act sooner to prevent a full-blown recession of two quarters of negative growth? Just how bad do you think the economic slowdown will be?

Now that Musharraf's nine-year reign has come to a grinding halt, what do you think the priority for his successor should be?

Should it be containing militant violence or attending to Pakistan's mounting economic ills of poverty and corruption? And who do you think is up to the task of replacing Musharraf?