City News Blog

Crisis summit for lenders

Posted on: 14 April 2008

Related Category: Banking

Alistair Darling, the chancellor of the Exchequer has called a summit with the Council of Mortgage Lenders (CML) next week to resolve a crisis in the UK housing market.

critics say the chancellor’s mortgage summit is long overdue, after the cost of many mortgages has gone up, even as the official interest rate has been coming down Deputy leader of the Liberal Democrats Vince Cable said last night: “I’ve been advising Darling to meet with the CML since long before the credit crunch arrived to discuss the potential problem of the housing bubble bursting.

“Now, there’s the additional problem of credit drying up, and the government needs to be prepared to grab the crisis by the scruff of its neck:’ The summit conies after Prime Minister Gordon Brown expressed concerns that banks may not be willing to pass on interest rate cuts on to consumers, after the Bank of England cut the base rate last week for the third time since December.

“To create the conditions where banks feed through their interest rate cuts to homeowners and new buyers, we must first rebuild confidence in the banking system and reduce the uncertainty that is currently holding the banks back from lending to each other,” Brown said. Business leaders, including figures from investment and high-street banks, will convene at No10 tomorrow for a more general “state of the economy” discussion before Brown leaves for a visit to the US, a Treasury spokesman said. Darling is to hold talks with the CML, chief secretary to the Treasury Yvette Cooper and housing minister Caroline Flint next week after he returns from China after talks on closer economic ties with the country.

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