Economic Downturn: All We needs is confidence in itself - Malaysiakini

While admitting that Britain is “in the eye of the storm”, the Prime Minister said in an interview with The Daily Telegraph that the country will see off the worst of the slowdown if the public can harness the “British spirit” and remain resolute and upbeat.

International forecasters say that Britain is heading for the deepest recession of any advanced economy, with unemployment predicted to pass 3  million, but Mr Brown appeals against “talking the country down”.

In a striking show of optimism, he declares: “I am absolutely confident about Britain’s future. I have utter confidence in our ability to come through this. I have utter confidence not only in the British people’s determination to come through this, but that people will work together to make sure Britain emerges from this.

“The British spirit is to see a problem, identify it, and get on with solving it. Once a problem hits us we are determined and resolute and we are adamant that we are going to deal with that problem.

“And that is the resolve, not just of the Government, but the resolve of the whole people.”

The Prime Minister, attending the World Economic Forum in Davos, Switzerland, admits that the stakes could not be higher, saying that if a London summit of world leaders in April fails, then the world risks

sliding into protectionism and an economic slump similar to the Great Depression of the 1930s.

The April summit, hosted by Mr Brown, will bring together leaders of the G20 economies, including Barack Obama, the US president.

The meeting is effectively the last chance for leaders to come up with practical solutions to re-establish trust in the world’s financial system, Mr Brown claims.

Drawing an ominous comparison with what happened when a similar London conference was called in 1933, he says: “People came to London in an attempt to get agreement, partly on trade, partly on other aspects of the economy. It failed.

“And it was partly as a result of that failure that the rest of the Thirties was blighted by protectionism.”

He adds: “I am determined that the London conference in April not only brings people together with a shared analysis and purpose, but also takes the practical steps that are necessary so that the global and financial markets work better in the future and people can have trust in them.”

In his interview, Mr Brown says that the speed with which Britain pulls out of recession is dependent on whether there is a concerted international effort to tackle the financial crisis.

In a sign that his appeal was already being heeded, it emerged that the US Treasury was considering a limited “bad bank” to mop up some of the distressed assets from lenders’ balance sheets.

In addition, the Obama administration was preparing to take further equity stakes in the big banks in a scheme that echoed the banking rescue plan announced by the Prime Minister last week.

During the interview, the Prime Minister criticises speculators who have talked down Britain and insists the country is “well placed” to emerge from the downturn.

On Wednesday, the International Monetary Fund forecast that Britain faced a deeper recession than other developed nations while a Daily Telegraph/YouGov poll indicated that Mr Brown’s end-of-year rally in the polls was over.

“We are in the eye of a global financial storm,” says Mr Brown. “We have got to show that the leadership we are taking can make a difference.”