Prime Minister Gordon Brown is to meet bank chiefs for breakfast talks tomorrow at Number 10 to discuss the current housing market crisis.

Last week, The Bank of England’s Monetary Policy Committee (MPC) cut interest rates from 5.25% to 5%. This is the third time since December that interest rates have been cut in an effort to protect the economy from the global credit crunch.

However, many lenders are yet to pass on the recent interest rate cuts. Instead they are increasing rates, asking for larger deposits, tightening lending criteria and, in some instances, withdrawing deals from the market altogether.

The PM and the Chancellor, Alistair Darling, are urging mortgage lenders to pass on recent interest rate cuts on to homeowners.

The meeting will be attended by senior executives of Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide and the Royal Bank of Scotland.

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