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In an unprecedented move the three most powerful central banks in the world have joined forces in an attempt to head off a global recession.

The Bank of England, the US Federal Reserve and the European Central Bank have launched a £50bn bid to try and stave off the problems being caused by the world-wide credit crunch.

It is hoped that the action they have taken will make mortgages easier to come by as the banks try to end the paralysis that has gripped world lending for the past five months and which has resulted in consumers having to pay more for mortgages and there were forecasts for mortgages being less than routinely available in 2008.

The three central banks hope to relieve some of the fears that have seized high street banks and give them some confidence back in lending to each other.

The Bank of England’s offered contribution is £20bn, with the Federal Reserve more than matching that, with more to come if required.

The banks have never worked together like this before and the move follows talks held between all major bankers in the US, the UK, the eurozone, plus Canada and Switzerland.

The Dow Jones Industrial Average took a major boost from the news, climbing over 200 points. London’s reaction was less enthusiastic, with some commentators wondering how desperate the measure appeared.

Nevertheless the effect on the inter-bank lending rates was immediate as they came down. These have remained unaffected prior to this despite the Bank of England lowering the base rate last week. Mortgages are affected by the rates at which banks lend to each other, so there is some hope that mortgage rates will start to come down as a result.

Northern Rock has already fallen victim to the credit crunch, with other banks announcing large losses recently. The central banks hope to head off any more such crises