British finance minister Alistair Darling has hinted he will downgrade his economic growth forecast when he presents his first pre-budget report to the House of Commons.
Speaking to the Financial Times, the Chancellor of the Exchequer said that the global credit crunch sparked by concern over sub-prime mortgages would have an impact on the British economy.
Mr Darling said lenders would become more cautious, which would affect the country's housing market.
'If you look at the consensus of the economic forecasters, it would be prudent to assume that (the credit squeeze) will have some effect on us here,' Darling told the FT.
'If you look across the world - given the importance of the US economy and given what's happened here in relation to the effect it will have on the availability of credit - it would be fairly odd if you didn't take account of that.'
Darling added that Britain was starting from 'a very strong position,' and noted he was confident the country's economy would ride out the credit crunch.
The UK was rocked last month when it emerged that Northern Rock, the country's fifth-biggest mortgage lender, had to apply for an emergency loan from the Bank of England because of the global credit squeeze.
