2 Oct

Senate backs revision of bail-out package

Senate backs revision of bail-out package

The UK mortgage market may be on course for an improvement in liquidity conditions after the US moved a step closer to agreeing a revised rescue package for its banking system.

An amended plan has been passed 74-25 by the Senate and will now be put before Congress, which rejected the original plan on Monday this week.

The new package still includes the $700 billion (£380 billion) bail-out, but also involves providing tax breaks for businesses and middle-income earners in a bid to reassure members of Congress who are concerned about the burden the deal imposes on taxpayers.

Should the measure now be passed, the consequent effects on confidence and liquidity could see a fall in interbank lending rates, enabling UK lenders to offer cheaper mortgages and loosen their lending criteria.

Nationwide said today that the recent "turmoil" resulting from the economic situation was a major cause of the fall in UK house prices in September.
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