LONDON, May 20 (Reuters) - British Prime Minister Gordon Brown will tell business leaders on Wednesday there can be no complacency about an economic recovery given persistent difficulties facing the global economy.
Brown's address to the Confederation of British Industry follows a report from the International Monetary Fund which highlighted an easing in Britain's recession but also said high household debt and a lending squeeze could dampen recovery. [ID:nLK976638]
"The Prime Minister will make clear that we continue to face challenging conditions in the global economy," Brown's spokesman told reporters.
"We have taken action to deal with the crisis in the UK, but faced with a challenging global economic environment, the Prime Minister will make clear there can be no complacency about the economic situation in Britain and the recovery."
Brown was due to speak at about 1945 GMT.
Finance minister Alistair Darling stood by his estimates for a recovery towards the end of 2009 in an interview with The Times newspaper on Wednesday, although forecasts from the Bank of England last week suggested the recovery could come later.
BoE Governor Mervyn King said there was an unusually high degree of uncertainty over the central bank's forecasts.
Darling expects the economy to shrink by about 3.5 percent this year before growing by about 1.25 percent next year.
However, most analysts regard next year's forecast of return to growth as overly optimistic. Britain's economy contracted by 1.9 percent on the quarter in the first three months of the year -- the sharpest rate of decline since 1979.
"While we are better placed than we have been in the past going into the downturn, we need to continue to act to ensure the banks deliver on their commitments on bank lending and we need to push ahead with the action we are taking on fiscal policy," Brown's spokesman said.
(Reporting by Matt Falloon; Editing by Ruth Pitchford)