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Brown backs UK Islamic banking

The UK chancellor Gordon Brown has today pledged his support for Islamic banking in Britain, saying that he wants to make the UK a centre for Islamic investment and increase trade with Muslim countries.

Speaking at a conference on Islamic banking in London, the chancellor said: "It is the vibrancy and dynamism of Britain's Muslims, combined with Britain's openness to the world and our historic ties with Muslim countries, that means the ambition you have set for yourselves with this conference -- to make Britain the gateway to Islamic finance and trade -- is one I believe Britain is well placed to achieve."

Mr Brown also commented that greater trade with Muslim nations and freer trading practices would benefit the economic growth of developing economies in the Middle East.

The UK government is currently putting together new legislation aimed at facilitating the use of Islamic banking products such as savings accounts and mortgages that are compliant with Shariah law.

Under the Islamic laws, Muslims are not permitted to earn interest, making traditional banking products problematic.

The move by the British government looks set to raise the profile of Islamic banking in the developed would, with high-profile banks increasingly becoming aware of the importance of this niche banking sector.