Page last updated at 15:53 GMT, Sunday, 25 October 2009

PM vows economic upturn by 2010

Gordon Brown
Mr Brown said the battle to prevent a depression was being won

Gordon Brown has promised the economy will return to growth by the turn of the year, in his first reaction to news that the UK is still in recession.

His podcast was released on the Number 10 website after official figures showed the economy was still shrinking.

The prime minister accepted times were tough but said the battle to stop "a second Great Depression" was being won.

But the Tories said the recovery was set to be "feeble" and the UK was lagging behind other leading countries.

In his message, Mr Brown pledged to take action against excessive bank bonuses and end "sharp practices" by credit card operators.

The prime minister said they should stop raising interest rates on existing debts without explanation and issuing unsolicited credit card cheques.

BBC political correspondent Gary O'Donoghue said there were no details of how the issue would be tackled ahead of an expected announcement on Tuesday.

Previously ministers have suggested banning credit card cheques.

Wall Street Crash

Mr Brown said: "We are announcing measures to make the credit and store card companies clean up their act to get you a fairer deal.

"Sharp practices by lenders - such as hiking interest rates on existing debts without explanation, sending out unsolicited credit card cheques and raising credit card limits without being asked - these sharp practices should end."

It would be suicidal to put recovery at risk by suddenly cutting off the funding and investment that is supporting young people, families and businesses
Gordon Brown

The podcast was released on the 80th anniversary of the Wall Street Crash and came after news that the UK economy shrank by 0.4% in the third quarter of 2009 - making the recession the longest since records began.

"My pledge to you is to make reform of the financial sector a reality and to see Britain's economy return to growth by the turn of the year," Mr Brown said.

He said it would be "suicidal" to start cutting spending, as the Conservatives have suggested.

"Although there are signs that confidence is beginning to return in some areas, we need to be cautious," he said.

"Now, more than ever, is the time for steady and clear policies. That is why it would be suicidal to put recovery at risk by suddenly cutting off the funding and investment that is supporting young people, families and businesses through the most challenging times in a generation."

He also insisted the fight to prevent "a second Great Depression" was being won as a result of international co-operation.

'Feeble recovery'

Shadow Business Secretary Ken Clarke said he could not say when the UK would come out of recession but that the prospects for growth in 2010 were not encouraging.

"Sooner or later we are going to start getting a very feeble recovery but it is going to be feeble and fragile," he told Sky News.

"We are worse affected than pretty well anybody else in the Western world, for some perfectly practical reasons, part of which is the colossal scale of the public debt."

Substantial measures were needed to get banks lending again and to help young people find work, Mr Clarke added, but he said he feared nothing would happen before the next election as the government was "inactive" and Mr Brown "burnt-out".



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