Guardian UK: Grim Brown warns of a bleak year for Britain

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Grim Brown warns of a bleak year for Britain


· Prepare for turbulence to come, says PM
· Credit crunch 'our biggest challenge'

Nicholas Watt, political editor
Sunday December 30, 2007
The Observer


Gordon Brown today issues a bleak assessment of the world economy as he braces Britain for a year of belt tightening in the wake of the credit crunch.

In a strong warning, which sets the backdrop for a campaign to revive his premiership, Brown tells Britain to prepare for 'global financial turbulence' in 2008. 'Our strong economy is the foundation,' Brown writes in his new year message. 'With unbending determination in 2008, we will steer a course of stability through global financial turbulence. The global credit problem that started in America is now the most immediate challenge for every economy.'

Brown's sober analysis comes in the wake of the autumn credit crunch that caused the first run on a British bank in more than a century after the Bank of England bailed out Northern Rock. The sight of thousands of depositors queuing outside branches across Britain to withdraw their savings was one of the factors that contributed to the dramatic fall in Brown's ratings in the autumn.

The Prime Minister knows he must turn round his and his government's fortunes in 2008 if he is to beat off a strong challenge from Conservative leader David Cameron and place Labour in a strong position to secure a fourth successive election victory. Jack Straw, the Justice Secretary, today warns that Tory messages are 'resonating' with voters.

But Brown receives a boost today as a new opinion poll shows that a 13-point Tory lead has shrunk to five points in just two weeks. In a YouGov poll for the Sunday Times, Labour is up three points on 35 per cent, the Tories are down five points on 40 per cent and the Lib Dems gain a point to 15 per cent. Downing Street, which believes that coping with the expected economic slowdown will be a decisive factor in the new year, will be encouraged by these results.

The Prime Minister tackles the financial threat head-on in his message as he pledges to repeat his success as Chancellor, when he helped to stave off recession in the face of a series of global economic crises. 'Just as we withstood the Asia crisis, the American recession, the end of the IT bubble and the trebling of oil prices and continued to grow, Britain will meet and master this new challenge by our determination to maintain stability and low inflation,' he writes.

'We will make the right decisions, not only this year but for the years ahead, to safeguard and strengthen our economy - and, by keeping inflation low, keep interest rates for business and homeowners low.' ......(more)

The complete piece is at: http://observer.guardian.co.uk/politics/story/0,,2233303,00.html