GORDON Brown mounted a spirited defence of his government’s economic record at the World Economic Forum in Davos yesterday, pointing to the country’s low inflation, low interest rates and low public debt.

He dismissed suggestions that London was “Reykjavik on the Thames” and rejected the comments of Jim Rogers, the investor, who warned a few days ago Britain was finished.

“You’re not going to build your policy around the remarks of self-interested speculators,” the prime minister said.

Brown refused to say when he thought the global economy would pull out of recession, saying it was dependent on international co-operation and, in particular, the G20 summit on April 2 in London. He said it was important to avoid financial protectionism. Other business leaders and policymakers at Davos warned that economic recovery was unlikely before the end of the year.

Brown’s comments come as the Bank of England prepares to cut interest rates to a record low this week. The Bank’s monetary policy committee (MPC), which has cut rates from 5% to 1.5% since October, is expected by the City to reduce them further, to 1%, this week.

This would mark a new low for rates in the Bank’s 315-year history, and some analysts think it will go further.

Michael Saunders, an economist with Citigroup, predicted a reduction to 0.5% on the back of new gloomy forecasts from the Bank, set to be published in its quarterly inflation report later this month.

However, the “shadow” MPC, which meets under the auspices of the Institute of Economic Affairs, believes rates have fallen far enough and the Bank should concentrate on other “unconventional” measures to boost the money supply.

For the second successive month, the shadow MPC has voted 6-3 to leave rates on hold, while calling for the Bank to introduce so-called quantitative easing. The majority on the committee said further rate cuts were futile because the key issue was the supply of money, not its price.

Hope was expressed at Davos that the world economy could pick up by the year’s end.

John Lipsky of the IMF said: “The economic news is going to be bad for a while, but we believe we can return the global economy to growth by the end of this year and towards trend growth during next year.”

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