The chancellor has defended the state of the public finances amid criticism of a future fiscal "black hole".

Gordon Brown reported that Britain was in the longest sustained period of growth since 1701, which he forecast would continue this year.

The economy has clocked up its 50th consecutive quarter year of expansion, he told MPs, unlike European competitors.

His growth forecast had defied critics' expectations and come in at 3.1 per cent  last year, as predicted, Brown said.

The Budget forecast was for a further three to 3.5 per cent growth rate this year, slowing to 2.5 to 3 per cent in the following 12 months.

This has been coupled with low inflation, expected to be 1.75 per cent this year and within the two per cent target in 2006, as well as record employment levels.

Fiscal rules

He denied that there is a "black hole" in the public finances, with debt levels manageable.

Borrowing is just 2.6 per cent of GDP, Brown reported, lower than all other major industrialised economies and set to fall successively in the next four years.

"We meet our first fiscal rule, the golden rule, in this economic cycle by a margin of £6bn," the chancellor said.

The second, sustainable investment rule, was met by £57bn.

With total borrowing standing at 34.4 per cent of national income, again lower than competitors, Brown boasted: "We are meeting both our fiscal rules, both in this economic cycle and next."