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Gordon Brown has stated that people worried about their homes and jobs that the economy was safe for them over the next few months. This statement came after a Downing Street meeting with bank chiefs at which the Prime Minister pledged a further £15bn of funding from the Bank of England for the cash-strapped UK banking system.

This latest cash injection means that over £50bn has been funnelled in to UK banks since the beginning of the global "credit-crunch", which was started by lenders that made massive losses on loans in the US sub-prime sector. Mr Brown insisted that the meeting with banking chiefs from the likes of Barclays, Lloyds TSB, HSBC, Royal Bank of Scotland and Nationwide was not a crisis summit, but rather a meeting that had been planned for some time.

The meeting would have included an attempt to get these major players in the mortgage market to pass on recent interest rate cuts to the customers. Mr Brown would have been very concerned that when the Bank of England announced its latest interest rate cut to 5% that the likes of Nationwide, Royal Bank of Scotland and Alliance and Leicester totally ignored it by actually raising the price of some of their products.

The talks coincided with a gloomy report from the Royal Institution of Chartered Surveyors which stated that 78.5% more of its members stating that house prices were falling than those who reported a rise. This is their most pessimistic view since its survey began in 1978. Mr Brown has travelled to the US to meet with finance chiefs to discuss the global credit crisis whilst his chancellor, Alistair Darling, will hold separate talks with mortgage lenders.

 

More Banks could be bailed out

 

 

The HaliLeading credit rating agency Moodys have declared that Britain could bail out more banks to the tune of the £100bn Northern Rock rescue package in the autumn of 2007. The agency gave its backing to Gordon Browns financial policy by saying that the government could bail out more banks without losing the countrys status as a top-rated bond issuer.

However, indications remain strong that mortgage rates are still rising and house prices falling. Halifax, the nations biggest borrower, followed its main rival Nationwide in putting up interest rates on its two year fixed and tracker mortgages by 0.5%, despite the latest base-rate cut by the Bank of England. The shortage of mortgages has led a top estate agent, CB Richard Ellis to warn that house prices could drop by as much as 10% this year.