PM forced to address questions about his leadership

Yesterday, Prime Minister Gordon Brown met with bank chiefs from Lloyds, Barclays, HSBC, RBS and Nationwide as the City struggles with fallout from the US sub-prime crisis and the credit squeeze.

No. 10 said the talks were to discuss ways to improve confidence in the housing market and was not a crisis meeting and had been in the Prime Minister’s diary for some time.

The PM said the discussion included measures to ensure lenders pass on the Bank of England’s interest rate cuts to homeowners.

Gordon Brown said he wanted to show people worried about homes and jobs the economy was safe for them over the next few months and added that he will not be diverted from the right long-term decisions for the UK’s economy even if they are unpopular in the short-term.

The talks came as the Royal Institution of Chartered Surveyors announced that its members had their gloomiest view of the property market for 30 years.

Furthermore, the British Retail Consortium said shop sales in March had declined by 1.6% from the same period compared with 12 months earlier.

The Pound has fallen to a new low against the euro reflecting currency traders’ concerns about the British economy.

Following the breakfast meeting with bank chiefs, Mr Brown headed off to the states to meet finance chiefs to discuss the global credit crisis.

Liberal Democrat Treasury spokesman Vince Cable said he hoped the Government had taken a tough line with the banks at yesterday‘s meeting and hoped it was treated as a crisis meeting because it is a very serious situation.

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