Brown vows to fight off recession

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The Prime Minister said 2008 was likely to be a tough year, but promised to try and avoid a recession as severe as the one that affected the country in the 1990s.

Amid signs of a sharp downturn in the US and a deepening credit crisis, Mr Brown admitted Britain was going through a "period of uncertainty" but said Labour had helped the economy through "tough times" in the past and would do so again.

He wrote: "Our task is to steer a course of stability in uncertain times. When a major bank in America has to be rescued over a weekend and billions are wiped off share markets across the world, I understand that people are worried about the future."

His comments come as stock markets look set for another volatile day after the rate cut of 0.75% by the US Federal Reserve.

The rate cut prompted the American Dow Jones Industrial Index to register its biggest one-day gain in five years, rising 420 points to 12,392.66.

The Asian markets opened sharply higher on Wednesday. Japan's benchmark Nikkei 225 index jumped 2.8% to 12,292.73 at the end of the morning trading session, while Hong Kong's Hang Seng index surged nearly 3%.

British investors will be hoping the FTSE 100 index in London, which closed 3.5% up on Tuesday, will follow the positive trend. The gains made on the FTSE 100 saw the top flight index recover the bulk of the losses seen earlier in the week, when it fell by almost 4%, slumping to its lowest level for more than two years.

The Prime Minister mentioned the high interest rates and inflation of the 1990s, the Asian financial crisis of 1997 and the dot.com crash in 2000, but said the stability of the British economy would lessen the impact of an economic downturn.

High levels of home ownership, low national debt, and relatively low inflation would all help to cushion the blow of the latest period of uncertainty, he said.