Gordon Brown was warned by the Conservatives yesterday against a possible move by the Treasury to raise its view of the economy’s long-term potential growth rate in a way that could give him extra leeway to meet his strained public finance rules.

George Osborne, the Shadow Chancellor, said that any such move — which would stretch the length of the economic cycle and so flatter calculations of whether Mr Brown had met his “golden rule” — would be seen as “fiddling the figures”.

The warning came as speculation over a Treasury rethink of the economy’s crucial so-called trend rate of growth in this week’s Pre-Budget Report escalated at the weekend.

“For a Chancellor famous for his stealthy tricks this would be one of the stealthiest tricks of all,” the Shadow Chancellor said. “It would of course destroy any credibility for fiscal prudence that still remains.”

The golden rule, which means that all of the Government’s non-investment spending over an economic cycle must be paid for by taxes, not borrowing, is now widely seen by economists as badly frayed.

Having come close to breaking the rule, Mr Brown has twice avoided doing so after rethinks of the present cycle’s length, first by moving its start date from 1999 to 1997, then by extending its estimated finish from 2006 to 2009.

Mr Osborne’s suggestion that the calculations could be set for another rejig is backed today by the Ernst & Young ITEM Club, the independent forecaster. ITEM predicts that Mr Brown will abandon plans to cut the Treasury estimate of the “trend rate”, the “speed limit” at which the economy can grow over the long run without inflation, from 2.75 per cent to only 2.5 from next year.

By keeping the trend rate at 2.75 per cent, a move that could be justified by factors such as higher immigration, the Government’s finances would be flattered. The change would imply both stronger tax revenues, and more spare capacity in the economy, and thus an even longer economic cycle.

Both could give Mr Brown more scope to hit his rule since future budget surpluses could be counted in his calculations.

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