Darling moves to ease mortgage market

Chancellor Alistair Darling has announced the launch of a group looking at ways of easing conditions in the mortgage finance market.

He has appointed Sir James Crosby, deputy chairman of the Financial Services Authority, to work with lenders, the Bank of England and the Treasury.

They will look at ways to "reopen" the mortgage market, which has been constricted by the global credit crunch.

Speaking on BBC Radio 4's Today programme, Darling said: "We need to do everything we possibly can to help people through what is undoubtedly a difficult period.

"That means making sure we support the housing market but also making sure we support the wider economy, keeping people in work."

He went on: "I think we can do more, working with the industry, to try and reopen the mortgage market.

"The basic problem you have got at the moment is the banks and the building societies have found funding harder to raise because of what it happening in the financial markets generally."

He said Sir James would look at "whether or not we can get more money into the system", and would report back by the summer.

Darling made the announcement as the International Monetary Fund published its growth forecasts, predicting that the UK economy will grow by 1.6 per cent this year and next.

This is lower than the 1.75-2.25 per cent predicted by the chancellor in last month's budget.