UK's Brown sees financial turbulence ahead

By Adrian Croft

LONDON, Dec 30 (Reuters) - British Prime Minister Gordon Brown said on Sunday his 2008 priority would be dealing with the global credit crunch and steering a stable course through the financial turbulence.

"The global credit problem that started in America is now the most immediate challenge for every economy and addressing it the most immediate priority," he said in a New Year's message setting out his goals for next year.

"Our strong economy is the foundation. And with unbending determination, in 2008, we will steer a course of stability through global financial turbulence," he said.

Six months after succeeding Tony Blair, Brown's popularity has slumped due to government blunders and growing economic clouds, including a crisis at mortgage lender Northern Rock that led to the first run on a British bank in more than a century.

Northern Rock, Britain's highest profile casualty of the credit crisis, has had to borrow at least 25 billion pounds ($50 billion) from the Bank of England.

Brown and finance minister Alistair Darling have come under fire for their handling of the crisis but Brown expressed confidence the economy would not be pushed off course.

The economy has enjoyed solid growth since Brown's Labour Party came to power in 1997, but weakening house prices and sliding consumer morale have raised fears of a slowdown next year.

"I promise that we will take no risks with stability," said Brown, finance minister for 10 years under Blair, and he vowed to keep interest rates low by keeping inflation low.

Brown has invited German Chancellor Angela Merkel and French President Nicolas Sarkozy to London for a meeting on financial market stability, expected in the first half of January.

After an early honeymoon with voters, Brown's popularity quickly wore off and Labour lags the opposition Conservatives by up to 13 points in opinion polls.

An uproar over the tax agency's loss of computer discs containing half the population's personal data and a storm over secret donations to Labour have embarrassed Brown.

Brown, who has been under pressure to set out his vision, attempted to do so in his New Year's message, pledging 2008 would be a year of "real and serious changes" for Britain.

New laws would bring long-term changes in energy, climate change, health, pensions, housing, education and transport, he said, while Britain would continue to work to counter the threat of global terrorism.