LONDON - Prime Minister Gordon Brown, aware his chances of re-election may hinge on the economy emerging from recession, called on Monday for a global growth strategy to tackle trade and currency imbalances.

This strategy should also deal with the inefficient use of reserves and instability in oil prices and would agree on the contribution to higher growth that each continent could make, Brown said.

If we are to have balanced and sustained growth that will keep unemployment low, we will have to address together -- and my chosen vehicle is the G20 -- a strategy for global growth, Brown told the annual conference of the Confederation of British Industry (CBI).

Brown did not single out countries but the United States has argued that an undervalued Chinese currency is exacerbating imbalances that were a root cause of the financial crisis.

The International Monetary Fund also says China needs a stronger yuan as part of a package of policies to help rebalance its economy.

IMF Managing Director Dominique Strauss-Kahn told the conference that the global economy was in a holding pattern and vulnerable to further upheaval.

DEFICIT CUTTING

Conservative leader David Cameron told the conference that investors would doubt Britain's creditworthiness if they were not convinced that the government was prepared to get a grip on public finances.

A poll published on Sunday showed the Conservatives' lead over the Labour Party slashed to six points, raising the possibility neither party might win a parliamentary majority in a general election due by June.
That would be the worst case scenario for financial markets, which fear the result would be a weak government incapable of taking decisive action to cut public sector borrowing, forecast to hit 175 billion pounds this year.

The Conservatives want immediate action to cut public spending but the government says that could endanger recovery.

Cameron confirmed the Conservatives would deliver an emergency budget within 50 days if they win the election.

But Cameron too has begun to speak of a need for a pro-growth budget, as well as a deficit-cutting one, if the Conservatives win power. The subtle change in approach may reflect Conservative fears that its previous austerity message was turning off some voters.

Brown suggested European growth measures could include incentives for private investment, a push on European-wide research and development, and steps to break down barriers to cross-border business, including in banking and financial services.

He promised to keep economic stimulus measures in place until the recovery is established.

Choking off recovery by turning off the life support prematurely would be fatal to world growth, he said.

Britain lags many European rivals in emerging from recession. The economy shrank by 0.4 percent in the third quarter, but the government still believes it will see growth by the turn of the year.

(Additional reporting by Fiona Shaikh; editing by Stephen Nisbet).

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