Darling defends economy comments

The Chancellor said the UK was experiencing a "profound downturn" amid "unique" pressures from the credit crunch and soaring food prices.

Mr Darling was trying to clarify his position after an interview with the Guardian in which he warned that global economic conditions were the worst for 60 years, and no-one knew how bad things would get.

The remarks were the gloomiest official assessment so far of the UK's situation - significantly worse than previously voiced by Gordon Brown.

Mr Darling told Sky News: "We are facing a profound economic downturn along with every other country in the world.

"The difference is between us and previous governments, other parties, is that we are taking action to help people - whether it is rescuing Northern Rock, or whether it is helping people to get back into work as they lose their jobs, or tax rebates which are due at the end of next month."

However, he insisted that the Government would "help" people hit by the crisis, and played down rumours of tensions with the Prime Minister and other senior figures.

Mr Darling also sought to tone down his earlier comments by stressing that the "fundamentals" of the UK economy remained strong despite the "unique set of circumstances" globally.

He said: "I think it is important that Government ministers and particularly me as Chancellor level with people. I explained that what is happening to every country in the world, ours included, is that we have a credit crunch the like of which we have not seen for generations.

"We have that at the same time as oil and food prices going up. But I am also clear that the fundamentals of our economy are strong."