The US Federal Reserve is to inject another $800bn (£526.8bn) into its economy in a further effort to stabilise the financial system, according to Henry Paulson, US treasury secretary, who said the stimulus package was aimed to make more lending available to consumers.

Separately, the Federal Reserve also unveiled a $200bn plan to help unfreeze the consumer credit market. As the credit crisis worsens, banks and other financial institutions have been reluctant to lend, deepening the economic slowdown. Key lending such as credit cards, car loans and student loans had essentially come to a halt in October, according to Paulson, and so the new measures are aimed at getting these types of lending back to more normal levels.

Under the latest rescue plan - which is in addition to the already-announced $700bn bank bail-out - the Federal Reserve is to buy up to $100bn in debt from the troubled mortgage giants Fannie Mae and Freddie Mac. The central bank said it would also buy another $500bn in mortgage-backed securities - pools of mortgages that are bundled together and sold to investors.

The Fed said that the $600bn effort to support the mortgage market was being taken to reduce the cost of home mortgages and increase their availability. It said the purchases of the mortgages and mortgage-backed securities would take place over a number of months.

The announcement came as Commerce Department figures showed US economic output shrank between July and September faster than initially predicted. Gross domestic product (GDP) fell at an annual rate of -0.5% in the third quarter from the -0.3% estimated a month ago.