British Chancellor of the Exchequer Mr Gordon Brown today rejected accusations that he is losing control of the public finances and is in danger of breaking his own fiscal rules.
With his annual pre-budget report just a few weeks away, Mr Brown told the Confederation of British Industry's (CBI) annual conference that fiscal discipline matters and that he would not repeat the mistakes of the past.
"Our stability first policy means that our fiscal decisions will ensure that while debt is rising substantially in other countries, levels of debt in Britain will remain low and sustainable.
"At all times we will meet our fiscal rules. . . . Our fiscal position is sustainable over not just a year but over the next decades." Mr Brown self-imposed fiscal rules state that the government should only borrow to invest over the economic cycle and that public debt is kept at a sustainable level.
But many economists have predicted that rising public spending to fund health and education at a time when tax revenues have slowed as a result of the global economic slowdown have put Mr Brown in real danger of breaking his own rules.
Mr Brown, however, has always maintained that boosting spending to revive flagging economies is the right thing to do, unlike in the euro zone where countries have come under fire for breaking the bloc's fiscal pact through the downturn.
"It is where there is no credible long-term commitment to fiscal stability over the cycle that economies can find themselves in the perverse position of cutting spending or raising taxes at the wrong time of the economic cycle," he added.
Mr Brown also showed his support for the Bank of England's Monetary Policy Committee's decision to raise interest rates earlier this month. "I believe that the MPC is right to take the forward-looking approach of pre-emptive action taken as the economy strengthens to lock in stability," he said in a speech to the CBI.
Mr Brown also warned of the dangers of a trade war ahead of a meeting with US Treasury Secretary Mr John Snow today at which he will discuss the US tariffs on steel imports.