UK's Brown says no room for complacency on economy

LONDON, July 5 (Reuters) - British Prime Minister Gordon Brown will use next week's G8 meeting to urge continued action to boost the global economy, despite indications that the worst of the financial crisis has passed, government sources said.

Brown will argue that rising oil prices and constrained bank lending remain threats to recovery and world leaders need to step up the fight against protectionism.

"The need for coordinated international action to implement the decisions we have taken has never been more crucial," Brown will say.

"If we do not take the necessary action now to strengthen the world economy and put in place the conditions for sustainable world growth we will be confronted with avoidable unemployment for years to come."

World leaders meet on July 8-10 in Italy to discuss global challenges, chief among them the worst recession in living memory.

Brown's five point plan for the G8 has a familiar ring: increasing bank lending, action on oil prices, action against protectionism, increasing investment and preventing a generation of young people from being out of work.

But he can take some comfort from evidence that Britain's economy is starting to stabilise after shrinking at its fastest pace in more than 50 years in the first three months of the year.

A survey last week showed Britain's dominant services sector expanded for a second consecutive month in June, raising the prospect that the economy could return to growth as early as the second quarter.

(Editing by Elizabeth Fullerton)