Gordon Brown, the Chancellor of the Exchequer, today warned that the global economic recovery is "uneven and still fragile in the wake of surging oil prices".

In a keynote speech to delegates at the Labour Party Conference in Brighton, Mr Brown also warned against inflationary pay deals and vowed not to offer any "irresponsible pre-election promises". The Labour Government is expected to call a general election early in 2005.

Mr Brown’s concerns about the global economy comes in the wake of disappointing economic news from the world’s major economies. In particular, the economic recovery in America appears to have slowed down from the growth rates witnessed earlier in the year.

His comments may raise concerns that the UK economy may not grow as fast as Brown has predicted, meaning that the public finances may slip further into the red than predicted if tax revenues rise by less than anticipated.

In his Budget earlier this year, Brown said he expected the UK economy to grow by between 3.0 and 3.5 per cent both this year and next.

Because of the above-trend growth predictions, Brown expects the public deficit to decline over the coming years. He has pencilled in public sector net borrowing of £33 billion in 2004-2005, down slightly on the previous year.

With an eye to the election, Mr Brown praised the Government's record on delivering economic stability.

"We will never be complacent about stability. We must show at all times we have the discipline and strength to take the tough long term fiscal and monetary decisions for Britain.

"Because, with the economy central to people's concerns at this next election as at every election, that is the way to entrench and retain the trust of the people on the economy and pay for the much needed reforms and investments in public services."

Although his speech concentrated largely on politics, Mr Brown did return to some familiar economic themes.

He cautioned delegates against expecting any pre-election spending spree on the public services.

"Facing a global recovery that is uneven and still fragile, where oil prices have doubled and imbalances have worsened, I will tell the G7 and IMF when I travel to Washington later this week that we will take no risks with inflationary pay deals, and from this Chancellor and this party no short-termism, no easy options, no irresponsible pre-election promises."

He also signalled new moves to create a more skilled, flexible workforce.

"We will, at the coming election, make a historic promise: by moving beyond the voluntarist system of training that has failed, by extending nationwide our employer training pilots, [and] ...for the first time guaranteeing to every single member of the workforce and every unemployed man and woman who is without basic skills the resources and the learning facilities to acquire the skills they need.

"We will set up a commission on the gender pay gap and review the right for parents to request flexible working, because we have not yet done enough and we must do more."

Patricia Hewitt, the Trade and Industry Secretary, earlier pledged the Government's support for workers at Jaguar.

"Jaguar's decision a week ago to halt production at Browns Lane was a devastating blow to their workers - many of whom are here today," she said.

"We are not going to turn our backs on a great British brand and a great British workforce.

"That's why I have told the company to sit down with workers and their unions, to listen to their proposals and to have real discussions about how we secure the company's future in the West Midlands."

Earlier John Prescott also gave his support to the 1,150 Jaguar workers in Coventry faced with redundancy.

The Deputy Prime Minister - nicknamed "Two Jags" because of his use of the cars - urged the company to reconsider its decision to cut the jobs.

"These are quality cars built, produced and designed here in Britain. We want to make sure they continue to be built, produced and designed here," he said.

"It's a very successful quality car. I have got one car and I have got this car, a Government car, and I am damn proud of them," he added.

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