City A.M. Reporter
Prime Minister Gordon Brown said it would be “suicidal” to suddenly cut off the government’s fiscal stimulus in the economy, in his weekend podcast.<br /><br />Brown, who was speaking on the 80th anniversary of the Wall Street crash, said “times were still tough” but confidence was beginning to return in some areas of the British economy. On Friday, figures showed Britain’s economy contracted in the third quarter of this year, quashing hopes the downturn was ending and instead marking the longest recession on record. <br /><br />Brown said the economy would return to growth by the turn of the year, and pledged to make reform of the financial sector, a reality, acting on excessive banking bonuses.<br /><br />“Although there are signs that confidence is beginning to return in some areas, we need to be cautious. Now more than ever is the time for steady and clear policies.”<br /><br />Brown’s comments were echoed yesterday by secretary to the Treasury Liam Byrne who said the UK’s economic stimulus should be phased out carefully, <br />adding the same kind of stimulus seen during the recession will not be needed once growth returns next year.<br /><br />The government has pumped billions of pounds into the economy through various fiscal and monetary stimulus schemes, which has contributed to record budget deficits and has so far failed to drag the economy out of recession.