The chancellor has insisted that his growth forecasts set out in the Budget remain "realistic".

Giving evidence to the Commons Treasury committee on Wednesday, Alistair Darling denied that the turmoil in world financial markets since his statement last week would undermine his predictions.

Darling told MPs last week that the economy would grow by between 1.75 and 2.25 per cent this year, and by 2.25 to 2.75 per cent in 2009.

But economists suggested he had underestimated the impact of the credit crunch even before Monday's huge losses in the markets.

However the chancellor said the collapse of US investment bank Bear Sterns this week had not changed his view that Britain would ride out "shocks" from the credit crunch.

"I think that the forecasts we have set out are reasonable and we have taken account of the uncertainty," he said.

"I believe that what we have done is realistic," he added. "If you look at the Treasury forecasts over the last few years they have been pretty good and have been recognised as such."

Darling said new figures showing a fall in unemployment in the last month showed that the UK economy was still "resilient".

"I think if you look at the data that is published today it bears out our forecasts, that is [that] there will be a slowdown but our economy remains fundamentally strong, it is resilient, and we are well placed to deal with a period of great uncertainty," he argued.