The chancellor will this week mount a new offensive to restore confidence in his management of the economy.

Following the economic downturn and the stockmarket slide, Gordon Brown will say Britain is well prepared for the turbulent times ahead.

"The recent volatility in global stock markets demonstrated once again that no country can insulate itself from the ups and downs of the world economy. I understand the concerns that uncertainty causes for investors and consumers alike," he will say on Monday.

"Indeed, it is because we have always understood that monetary and fiscal regimes must work well in challenging times as well as good times."

Departing from his "end to boom and bust" soundbite, the chancellor will, say: "The true test of economic policy is whether it can cope with difficult as well as good times."

He will say that the British economy will demonstrate "credibility and resilience" over coming months.

"Instead of being first into recession and last out, the country that normally suffers most, Britain has continued to grow over the past six years while every other country has been in recession," he will add.

The intervention comes amid growing signs that the chancellor is losing his hard-won reputation as a safe pair of hands.

He has been forced to downgrade his economic growth forecasts and may be forced to do so again in the March budget.

Recent reports have warned that he will be forced to increase borrowing or reduce spending as the economic slowdown impacts on the Treasury's bottom line.