Darling moves over mortgage market

Sir James Crosby, deputy chairman of the Financial Services Authority, will work with lenders, the Bank of England and Treasury to "reopen" a mortgage market increasingly constrained by the global credit crunch.

Mr Darling told BBC Radio 4's Today programme: "We need to do everything we possibly can to help people through what is undoubtedly a difficult period.

"That means making sure we support the housing market but also making sure we support the wider economy, keeping people in work."

The International Monetary Fund's growth forecasts paint an increasingly gloomy economic picture.

The UK's economy is forecast to expand by 1.6% this year and in 2009 - lower than the 1.75-2.25% predicted by the Chancellor in last month's Budget.

But Mr Darling said: "The IMF has downrated every country's growth forecast in the light of what's been happening in the world economy.

"However, they have lowered their expectations in relation to us by less than other countries."

Mr Darling insisted he stood by the growth forecast he had made in the Budget and said he remained "optimistic".

He said the IMF still predicted growth in the UK and added: "We do have a very strong economy, it has proved remarkably resilient over the years."