PM 'concerned' at credit card rates

The Prime Minister insisted it was unacceptable to saddle British customers with big increases as the recessions bites.

The Government would act to establish "clear principles" to make sure companies treated people fairly, he added.

Downing Street said Mr Brown had been alarmed by recent examples where credit rates had gone up by 10% overnight, and a store card which was charging 200%.

The intervention came after a study of 240 credit cards showed that, while the Bank of England had dramatically reduced its official bank rate from 5% in May to 3% this month, the cost of borrowing on cards had gone up.

The research by banking experts Defaqto for The Independent showed that since May, the average annual percentage rate (APR) on cards rose by 0.4%, climbing from 17.2 to 17.6%.

Speaking at his regular Downing Street press conference, Mr Brown said: "I think we have got to bring the credit card industry in to talk to them to join with us in establishing clear principles to apply to the costs people face on their existing debts.

"This new responsible approach to lending that I think that the credit card industry wants to support will help households through the difficult period that they have. I think by setting new rules and establishing clear practices, I think the public will be in a better position to look at the credit card industry as a whole."

The PM's spokesman said that Mr Brown had been "very concerned" by the actions of some credit card companies, which was "hard to justify". The industry has been summoned to the Department for Business, Enterprise and Regulatory Reform to discuss the issues, he added.

Mr Brown again dropped heavy hints that the Government is set to cut taxes in a bid to kick-start the economy. He also insisted that any reductions and investment packages should be co-ordinated globally to have the maximum impact, and called for a deal on liberalising world trade to be struck "within days".