The US Government took control of Freddie Mac and Fannie Mae, the stricken companies that underpin America’s mortgage market, yesterday and promised to inject up to £110bn of taxpayers’ money to keep them afloat.

The cash infusion was one of a series of measures designed to restore order to America’s stricken financial system that included the immediate removal of the companies’ chief executives and the elimination of future dividends to shareholders.

The US Government’s decision to guarantee the two groups’ survival is good news for British banks and, in turn, British homeowners. British banks have billions of dollars invested in bonds that are insured by Freddie and Fannie and they could have translated into huge losses if either group had gone under - leaving the banks with even less money to make available for mortgages.

Sunday Times, The Observer, Financial Times, Daily Telegraph