Prime Minister Gordon Brown yesterday insisted Britain's economy remained strong as financial turmoil engulfed world markets.
But Bank of England Governor Mervyn King has been forced to postpone a visit to the West Midlands today, where he was due to meet business leaders.
The Bank, in its first such intervention in six months, yesterday pumped £5 billion into money markets as leading shares tumbled in the wake of the cut-price sale of troubled investment bank Bear Stearns in the US. But the BoE's action failed to stem the plunge on London's FTSE 100 Index which closed 3.9 per cent down.
With analysts indicating other firms were vulnerable, fears over the US economy sent oil prices soaring to new records and the dollar weakened to a record low against the euro.
Mr Brown, however, told the Commons Britain's economy was "resilient" and its "fundamentals strong" while pledging to take whatever action was necessary to maintain financial stability.
Tory leader David Cameron accused the Government of having failed to prepare for the downturn by allowing the budget deficit to rise, becoming the largest in Western Europe.
But Mr Brown said: "We will at all times remain vigilant and - particularly at this time of global uncertainty - will continue to take whatever action is necessary to maintain economic stability."
The Prime Minister was reporting back to MPs on last week's European summit. He said the financial turbulence and need to take co-ordinated action to maintain stability and growth was the most immediate concern before the Council. Mr King had been due in the West Midlands today to give a private briefing to members of the Coventry and Warwickshire Chamber of Commerce but was forced to postpone.
Chamber chief executive Louise Bennett said: "We fully understand the reasons and realise the steps the Bank takes in the coming days and weeks will be heavily scrutinised and will have a major bearing on the way this affects the US economy." She said the decision by the Bank to put £5 billion into the money markets was to be welcomed. "But the early indication was that was still some way
short of the amount that needed to be injected to correct the shortfall," she said.
Despite the global problems, the Birmingham Chamber of Commerce and Industry said firms in the West Midlands were positive.
Spokesman John Lamb said: "Our latest quarterly survey is showing companies have made contingencies and are toughing it out."
However, he said the longer the situation went on the more unsettled things may become.
The comments were borne out by employers' association EEF West Midlands, which said that manufacturers in particular were remaining confident and that orders were up.
In the US, where the Bear Stearns crisis raised the spectre of Northern Rock, the US Federal Reserve stepped in by cutting its lending rate to banks to 3.25 per cent from 3.5 per cent on Sunday and created another short term loan facility for big investment banks in an attempt to ease the pressure.
Attention today will be focused once more on the Federal Reserve which is expected to cut rates again in an attempt to spur on the world's largest economy, which is teetering on the brink of recession.
Meanwhile, Melanie Mitchley, a director with credit report service Callcredit, said the rescue of Bear Stearns should be a wake-up call to British consumers. "People need to start thinking about how the reality of the credit crunch is going to affect their own financial situation.
"Since the Northern Rock crisis and the signs of a troubled economy, a quarter of all UK consumers have become more concerned about their finances and understandably, their confidence has been shaken," she said.
"This latest development is an opportunity to encourage all consumers who both save and borrow to assess their current financial health, and crucially, not to take on additional credit they can't afford," she added.
She warned that in order to avoid debt, consumers needed to move away from the 'buy now, pay later' attitude towards the 'save now, buy later' mentality.