🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 1-UK's Brown calls for plan on global imbalances

Published 11/23/2009, 08:00 AM
Updated 11/23/2009, 08:03 AM

* G20 strategy must tackle trade, currency imbalances-Brown

* Brown to make proposals for new European growth strategy

* Brown promises to keep economic stimulus in Britain (Updates with more quotes from Brown and Cameron)

By Adrian Croft

LONDON, Nov 23 (Reuters) - Prime Minister Gordon Brown, aware his chances of re-election may hinge on Britain's economy emerging from recession, called on Monday for a global growth strategy to tackle trade and currency imbalances.

This strategy should also deal with the inefficient use of reserves and instability in oil prices and would agree on the contribution to higher growth that each continent could make, Brown said.

"If we are to have balanced and sustained growth that will keep unemployment low, we will have to address together -- and my chosen vehicle is the G20 -- a strategy for global growth," Brown told the annual conference of the Confederation of Brtish Industry (CBI), Britain's leading business lobby.

Brown did not single out countries but the United States has argued that an undervalued Chinese currency is exacerbating imbalances that were a root cause of the financial crisis.

The International Monetary Fund also says China needs a stronger yuan as part of a package of policies to help rebalance its economy.

IMF Managing Director Dominique Strauss-Kahn told the conference that the global economy was in a holding pattern and vulnerable to further upheaval.

DEFICIT CUTTING

Opposition Conservative leader David Cameron told the conference that investors would doubt Britain's creditworthiness if they were not convinced that the government was prepared to get a grip on public finances.

A poll published on Sunday showed the centre-right Conservatives' lead over Brown's Labour Party slashed to six points, raising the possibility neither party might win a parliamentary majority in a general election due by June.

That would be the worst case scenario for financial markets, which fear the result would be a weak government incapable of taking decisive action to cut public sector borrowing, forecast to hit 175 billion pounds ($263 billion) this year.

The Conservatives want immediate action to cut public spending but the government says that could endanger recovery.

Cameron confirmed the Conservatives would deliver an emergency budget within 50 days if they win the election.

But Cameron too has begun to speak of a need for a pro-growth budget, as well as a deficit-cutting one, if the Conservatives win power. The subtle change in approach may reflect Conservative fears that its previous austerity message was turning off some voters.

Brown suggested European growth measures could include incentives for private investment, a push on European-wide research and development, and steps to break down barriers to cross-border business, including in banking and financial services.

He promised to keep economic stimulus measures in place in Britain until the recovery is established.

"Choking off recovery by turning off the life support prematurely would be fatal to world growth," he said.

Britain lags many European rivals in emerging from recession. The British economy shrank by 0.4 percent in the third quarter, but the government still believes it will see growth by the turn of the year. (Additional reporting by Fiona Shaikh; editing by Stephen Nisbet) ((adrian.croft@reuters.com ; +44 207 542 7947; Reuters Messaging: adrian.croft.reuters.com@reuters.net)) ($1=.6645 Pound)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.