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Hard times ahead warns PM as he meets bank chiefs
Nicholas Cecil, Political Correspondent15.04.08
Gordon Brown today warned that the international credit crunch will continue to bite.
The Prime Minister signalled that the battle against global economic turmoil was far from won, saying: "There are still difficulties ahead."
He added: "My own view, having been a finance minister before prime minister, is we can act quickly to deal with the problems.
"We know what to do with disclosure, oil prices, food prices, better global supervision, better free trade agreement. All these things will contribute to building confidence that we can move forward."
Mr Brown, speaking to the US broadcaster CBS News before he flies to America, blamed finance bosses for sparking the problems now hitting homeowners who are seeing their mortgage bills rise.
"There's no doubt that off-balance sheet activities by the major institutions and in the sub-prime market more spectacularly have led to problems for the big institutions, these people are not lending money the way they used to," he said.
"People are finding it harder to find mortgages; a small or medium-size business looking for funds has more problems."
The Prime Minister met bank chiefs at No 10 today amid warnings from some finance bosses not to try to make them scapegoats for the economic problems facing the UK. Afterwards a Downing Street spokesman said: "The Bank of England is today injecting an additional £15 billion liquidity into the markets, taking its total injection over recent months to over £50 billion.
"We have been working with the Governor of the Bank of England for some time on further proposals to support the financial system and help the functioning of the money markets."
The Government has urged banks and building societies to pass on interest rate cuts. But finance chiefs point out that state-owned Northern Rock has not yet lowered its lending rates following the cut in interest rates to five per cent last week.
With higher oil prices fuelling inflation, Mr Brown also turned the spotlight on oil-exporting countries.
He stressed that they had a responsibility to increase production to counter the economic slowdown.
At a private meeting at Goldman Sachs in London this afternoon, the Prime Minister was due to say: "Oil consuming countries must take action to improve energy efficiency and promote alternative energy uses."
The Conservatives sought to keep the focus of Britain's economic problems firmly on Mr Brown. Shadow chancellor George Osborne claimed the Prime Minister's economic reputation was "in tatters", after an opinion poll found more than two thirds of those questioned lacked confidence in the Government's ability to deal with the turmoil.
