PM plea over small business lending

The Prime Minister welcomed a commitment by the European Investment Bank to make £4 billion available to provide finance to firms in the UK.

Following talks in Downing Street with German Chancellor Angela Merkel, Mr Brown said it was now up to the banks in Britain to honour their commitments.

"We must continue to encourage banks to lend. Having re-capitalised the banks we must ensure that the money is used to sustain credit lines on normal terms to solvent businesses," he said. "I urge banks not to change the terms and charges for existing lending to small and medium sized enterprises."

The Prime Minister said the wider economic problems could only be dealt with through concerted international action.

He said it was now essential that the International Monetary Fund played a central role in preventing the crisis spreading to countries like Hungary and Ukraine. "This is a global problem that requires a global solution. No country, no matter how big, can solve these problems on their own," he said.

Asked about interest rates, Mr Brown said: "The Bank of England has brought down interest rates twice in recently. They continue to look at what they can do for the future."

He defended the independence of the Bank as "an anchor for our financial and economic system".

Mr Brown held out the prospect of further Government action within days to help people suffering as a result of the crisis.

"I think you will see in the next few days us in a position to do more to help people face what is a global problem," he said.