Downing Street Says

Asked about the story in the Financial Times this morning that the UK Government will lend Iceland 3 million so it can pay UK depositors affected by the collapse of the online banking unit of Landsbanki, the Prime Minister s Spokesman said that there were discussions ongoing between the Treasury and the Icelandic authorities to agree a mechanism whereby the Icelandic Government could honour its obligation to UK depositors, and it was best to wait for an outcome to those meetings.

Asked if the Prime Minister agreed with the Governor of the Bank of England that we were now in a recession, the PMS replied that, as the Prime Minister had said during his European Council Statement on Monday, the world was facing a severe global economic downturn, with negative growth already seen in France, Germany and Italy this year, and the US last year. The United Kingdom could not isolate itself from this global downturn and the Government would do whatever it took for mortgage holders, small firms and employees, to help families and businesses through what would undoubtedly be a difficult period ahead.

Asked if the Treasury would be offering new help to homeowners whose properties were in danger of being repossessed, the PMS said that there was nothing to say ahead of the announcement from the Treasury.

Asked if the Government was planning to do anything about the rapid drop in the value of the pound, the PMS said that, as the journalist knew, we did not comment on currencies.

Asked if some of the bank bailout money would be allocated to the small business divisions of banks, the PMS said that was a question for the Treasury.

Asked if the Prime Minister welcomed the comments from the Governor of the Bank of England, the PMS said that, as the Prime Minister had said, we were facing a global economic downturn and the United Kingdom could not insulate itself from that downturn. However, the Government would do whatever it took for mortgage holders, small firms and employees, to help families and businesses through what would undoubtedly be a difficult period.

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» Wednesday, October 22, 2008

Economy

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