Gordon Brown trumpets prosperity ahead of election

Chancellor Gordon Brown trumpeted prosperity as he laid down the economic battle lines for the next election yesterday, but critics said he was too optimistic and would have to raise taxes if his Labour party won a third term in office.

The powerful finance minister used his pre-budget report to remind voters the country has now enjoyed the longest period of continuous growth on record - 50 successive quarters.

In a populist touch, he also offered a raft of family-friendly measures plus money to keep local taxes down.

Despite disappointing tax receipts and signs the economy is slowing down, Mr Brown barely changed his forecasts and said he would still meet his Golden Rule - that the government borrows only to invest over the cycle.

"We are meeting our fiscal rule in this economic cycle and the next," Mr Brown told a packed House of Commons, though he admitted his room for error had shrunk to just £8 billion.

Financial markets barely budged, but political observers pored over the 53-year-old veteran Labour politician's words.

Mr Brown is widely assumed to want to succeed Prime Minister Tony Blair, who has vowed to step down after another term.