Governor Mervyn King told lawmakers that the current moves by the government are merely an “illusion” as the government cannot merely rescue the housing market by risking tax payers money amid the concern of fueling inflation.

Gordon Brown has considered various proposals to revive a mortgage market, which is in its greatest downturn since the beginning of the last decade.

Ross Walker, an economist at Royal Bank of Scotland Group Plc said that  “the governor seemed to be firing some warning shots” and that great emphasis was placed on the fact that the taxpayer would be underwriting the mortgage-lending process which could also alienate the Labour party further especially given the Northern Rock debacle.

The PM is also facing greater pressure from within the ranks of the Labour party as he must now revive both the economy as his popularity.

In his own intuitive manner Gordon Brown has announced plans to help first time buyers last week by cutting taxes on properties in order to counter the fact that the mortgage market has all but dried up.