Bailout pressure grows on Congress

New York/London: Shockwaves from the global credit crisis spread on Thursday, threatening industry and jobs worldwide and putting pressure on the US Congress to finish up a $700 billion bailout of the US financial sector.

The fate of the rescue plan, passed by the Senate 74-25 on Wednesday night, now lies with the House of Representatives, which is expected to vote on the bill on Friday.

US President George W. Bush on Thursday urged the House of Representatives to follow the Senate's lead and approve the economic rescue package, warning "people's jobs are in jeopardy."

"This issue has gone way beyond New York and Wall Street. This is an issue that is affecting hard-working people," Bush said in his 14th appeal in the past 15 days for lawmakers to back the controversial proposal.

"They're worried about their savings, they're worried about their jobs, they're worried about their houses, they're worried about their small businesses, and the House of Representatives must listen to these voices and get this bill passed," said the US president.

A key US lawmaker was cautiously optimistic yesterday that there is support in the House of Representatives to pass the financial rescue bill and added that the Treasury could begin buying tainted mortgage assets soon.

"I think so, I can't be sure,' House Financial Services Committee Chairman Barney Frank said on CNBC television.

The House rocked global markets on Monday by rejecting an earlier version of the bailout.

Job losses

The crisis has spread well beyond US shores and beyond the financial sector. Top automakers including General Motors Corp and Ford Motor Co warned of tough times, as evaporating credit for consumers cuts demand and could force production cuts and job losses.

"The problems of subprime and credit crunch are now all over the world," Ford Chief Executive Alan Mulally said. "The downturn is longer and deeper than we foresaw a year ago," he said.

US figures show falling factory output and plunging car sales, a sign of increasing reluctance of banks to give loans to business or individuals. Jobless claims rose in the US last week to their highest level in seven years, ahead of September payrolls data due out today.

Oil prices were down $3 a barrel on an expected slowdown in economic activity around the world, major US stock indexes fell more than 1 per cent and the dollar rose to a year high against the euro.

In a week marred by bank rescues across Europe, French President Nicolas Sarkozy's office said he would host the leaders of Britain, Italy, Germany and the European Central Bank on Saturday to discuss a response to the credit crisis. Sarkozy denied reports a 300 billion euro ($415 billion) plan akin to the US bailout was under consideration.