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Government strong-arm banks

By Sue Turton

Updated on 19 October 2008

The government says banks should ease off those struggling with mortgages, as the chancellor plans expenditure to aid the economy.

The government has said it will strong-arm banks into only repossessing homes as a last resort.

This comes as official figures out this week are expected to confirm that the British economy is shrinking for the first time since 1992.

The government has pledged to do all it can to help.

It also plans to put pressure on banks to keep open flows of credit to small businesses being hit by the slowing economy.

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