Brown has no fear over housing market

Brown was pressed in parliament on a statement by credit rating agency Standard & Poor's that fears of a sharp fall in house prices had prompted it to name Britain for the first time as a nation with a banking system that faces potential stress. S&P said the debt burden on mortgage borrowers was reaching "uncomfortably high levels" particularly in the Greater London area.

Responding, Brown said: "Whereas inflation was 10% at the beginning of the '90s, in the last world downturn, and interest rates were 15%...inflation is now just over 2%, interest rates are 4% and we have macro-economic stability.”.

Brown cited a report from the Bank of England which on Thursday said British and international financial systems remain healthy despite rising global risks in the past six months.

But in its twice-yearly Financial Stability Review, the central bank warned that risks remained and that banks should continue raising new capital or improving their core profitability to restore their resilience to future shocks.

"The IMF praised the macro-economic management of our economy and also said the banking system was in a very good position to withstand the difficulties," Brown added.

S&P's rival rating agency Moody's Investors Service said on Thursday that strong business at UK banks is helping them withstand economic and market uncertainty, keeping ratings generally high with a stable outlook.