Brown's Reckless Policies Cause Instability - Cable

2.26.00pm GMT Thu 29th Nov 2007

Responding to Mervyn King's comments that the economic outlook for the UK is 'uncomfortable', and news from Nationwide that UK house prices have seen their biggest fall in 12 years, Acting Leader of the Liberal Democrats, Vince Cable MP said: "For 10 years Gordon Brown recklessly allowed banks to engage in ever more unsustainable lending on the back of a bubble in the housing market. He achieved short-term growth at the cost of long-term stability.

"By not including house prices in inflation figures, and by actively encouraging a 'buy now pay later' attitude, Gordon Brown ensured that credit would remain cheap and in generous supply.

"With a rapidly cooling housing market and a global credit crunch starting to bite, after our years of plenty we are left with nothing in reserve to deal with the upcoming years of famine.

"If the economy is to have a soft landing rather than a crash, the Prime Minister must stop lurching from crisis to crisis, actually deal with irresponsible lending and act to support those struggling to pay their mortgages."