Gordon Brown today met Mervyn King, Governor of the Bank of England and Alistair Darling, the Chancellor, to discuss the current financial turmoil as it emerged that UK economic growth ground to a halt during the second quarter.

The early morning meeting went ahead as hopes heightened that the Bank of England's Monetary Policy Committee (MPC) will vote to cut the interest rate by a quarter point to 4.75 per cent when it convenes in nine days' time.

Economists had expected the MPC to cut the interest rate in November. However, some observers predict a reduction in borrowing costs will now be brought forward as domestic and global financial concerns continue to mount following last night's rejection of a $700 billion banking bailout by the US Congress.

Mr Brown spoke to Mr Darling and Mr King at Downing Street at a meeting that a Government spokesman described as “routine” but he said that the Prime Minister, the Chancellor and the Governor had discussed the "present situation".

It is also understood that the Treasury and the Financial Services Authority, the City watchdog, are also in talks about the global economy, after last night's dramatic decision by the US Congress to reject the biggest rescue of Wall Street since the Great Depression.

Mr Brown described the result of the US vote as "very disappointing".

However, shares in London were trading up by nearly 20 points at midday, after yesterday's near 270-point fall, as hopes rose that Democrats and Republicans will reach a compromise on a new rescue deal.

The Office for National Statistics (ONS) confirmed that the UK economy failed to grow between April and June this year.

The result marks the economy’s weakest performance in 16 years and raises the prospect that Britain is heading for a full-blown recession. The technical definition of a recession is two consecutive quarters of contraction.

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