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British PM urges banks to cut rates

Marketplace Staff Apr 15, 2008


Renita Jablonski: British Prime Minister Gordon Brown will be in the U.S. this week for talks about the global credit crisis. But this morning he’s doing the talking in the U.K. with senior bankers. He wants them to lower interest rates. From London, Stephen Beard reports.

Stephen Beard: A mortgage famine is developing in the U.K. As in the U.S., the banks are becoming increasingly reluctant to lend. Britain’s Central Bank’s tried to ease the situation, cutting interest rates twice in recent months, but the commercial banks have not passed those cuts onto their customers. Prime Minister Brown is today urging the banks to cut rates and make life easier for British consumers. Chris Hughes at the Financial Times.

Chris Hughes: We’re seeing evidence of house prices falling and that could hit the consumer. There’s mounting worries about the impact of the crisis on U.K. companies and their ability to borrow and fund their businesses. So, the situation is getting more critical.

The commercial banks are calling on the government and the Central Bank to pump more cash into the credit markets, but the U.K. authorities have already bailed out one bank and are anxious about risking more taxpayers money.

In London, this is Stephen Beard for Marketplace.

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