Gordon Brown believes the British economy is "well placed" to ride out the current turbulence in global financial markets.

The problems sparked by the US sub-prime mortgage crisis last year have led to banks tightening their lending criteria, affecting a range of consumer products such as loans, mortgages and credit cards.

During Commons question time, the Prime Minister told Labour Merthyr Tydfil MP Dai Havard the world economy is facing "uncertain times" due to the "difficulties" which started in the US.

"It's important to remember that what makes us well placed to face these difficulties are the low inflation we've achieved in this country, the very high levels of employment we've achieved and the low interest rates, which stand us in good stead for facing the global uncertainties," he said.

But Conservative leader David Cameron accused the PM of making a "short-term mess" of running the country and warned that Mr Brown's "relaunch" is "utterly doomed to fail".

He also taunted the Prime Minister over planned changes to capital gains tax, saying: "Your CGT policy is in complete confusion. You can't make up your mind about the Governor of the Bank of England. Your ID policy is in full retreat and all this from a Prime Minister who has lost everyone's identities, seen a run on a bank, got your ministers rocked from one funding scandal to another.

"You can talk about long-termism all you like. Everyone knows it's just a smokescreen for the short-term mess that you've made."

But Mr Brown said: "Nobody knows what you think about the big challenges - not the country, not your party and probably not even yourself.

"When it comes to the economy let's remember there were three million unemployed under the Conservatives and we have created three million more jobs.

"Interest rates went as high as 18% under the Conservatives. They've averaged 5% under Labour.

"We will return to your record as chief adviser to the former Chancellor of the Exchequer because you have no credibility when you talk about the economy."

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