The Islamic Finance Experts Group (IFEG) acts as an industry sounding board for HM Treasury and the Financial Services Authority (FSA) on Islamic finance.

Speaking after the meeting, Kitty Ussher announced that:

"The UK is at the forefront of developments in Islamic finance and London continues to seize new opportunities. We have made tremendous inroads in the wholesale markets, where it is estimated that the market is worth more than GBP250 billion worldwide and growing at 15 percent a year."

"But there is also an important domestic market which we want to be accessible and open. There are nearly two million Muslims living in the UK and, thanks in part to legislative changes introduced by this Government, the Islamic mortgage market is now worth over GBP500 million. Going forward, the Government and industry want to continue to do all we can to see the retail market flourish and ensure that everyone - regardless of faith - has equal access to competitive financial products."

The Government's aims for Islamic finance are to continue the growth of the global wholesale Islamic finance market in the UK, as part of the city competitiveness agenda being pursued by the Chancellor's High-Level Group on City Competitiveness; and to create a level playing field in alternative finance and investments, such as Islamic finance, in the retail market.

Presentations on the takaful (Islamic insurance) market were followed by a detailed discussion on the issues which seem to be preventing further growth in the Islamic finance retail market.

This covered: better marketing of products; the need to ensure that Islamic Finance products are competitively priced; and the role of Sharia'a standardisation in building consumer confidence in the Islamic retail market.

A presentation on National Savings & Investments' examination of the feasibility of the Government becoming an issuer of retail Islamic financial products was made to the Group. NS&I will report on this in Spring 2008.

These and other issues will be discussed in more depth at the next IFEG meeting, to be held in 2008.

The Treasury, the FSA and HM Revenue & Customs will take forward the retail Islamic Finance products agenda and will "continue strong and beneficial dialogue with the industry", according to the Treasury.