The Chancellor of the Exchequer, Gordon Brown, says he will not act to change interest rates despite a fall in industrial production.

Brown: determined to avoid "boom bust"

As the latest figures for production showed a 0.5% fall in output during February, Mr Brown said he would not order the Bank of England to cut interest rates to ease the strength of the pound.

Official figures for the last quarter, normally a more accurate measure of the economy's performance, show industrial production down 0.6%.

Manufacturers fear they are being priced out of world markets. Sterling is soaring against other major currencies as the Bank of England keeps interest rates high to meet the Chancellor's inflation target.

The production figures are worse than many City predictions, leading some to suggest that the UK is heading towards a recession in export industries.

'I'm aware of worries'

But Mr Brown said he was determined to manage the economy for long-term growth and would not overrule interest rate decisions made by the Bank of England's Monetary Policy Committee.

Bank of England: maintaining high interest rates

"If we took the action some people suggest in relation to the pound we would have our economy back to the stop-go economy of the past," he said. "We are building for the long term."

But he added: "I do not doubt and I have already said that there's a problem with the pound.

"I'm aware of the worries of exporters, I have said that I understand their concerns.

"But, of course, what some people are asking me to do to deal with the pound, or asking the Bank of England to do, is to take action that would make a recession more likely."

"The strategy of this Government is to deal with the long-term, long-standing weaknesses of the economy. We can only do that if we have a stable platform for growth."

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