UK government to boost lending

British prime minister Gordon Brown has announced a second bailout package to stabilise the ailing financial sector and ensure the resumption of lending to both households and businesses.

The measures include offering capital and asset protection to lenders on assets most affected by the crisis, as well as extending its credit guarantee scheme until the end of 2009 – rather than April 2009.

The package comes as the European Commission forecast that the British economy will shrink by 2.8% in 2009 and stage only a miniscule recovery in 2010.

Mr Brown said “good businesses must have access to credit, jobs should not be lost needlessly... the cost of doing nothing is simply too great. These are extraordinary times, they require unprecedented action.”