Tax cuts can help economy - Brown

Gordon Brown wants to maintain the initiative on the economy

Gordon Brown has fuelled talk of possible tax cuts by saying they could help to support consumer spending.

In a speech in London, Mr Brown referred to planned tax cuts in the US and Germany, saying countries must "work together" to tackle the downturn.

Earlier, the PM said he was looking "at everything" that could help the economy and would announce details within days.

David Cameron says the Tories will announce "tax changes to encourage businesses to take on workers".

Government action

The Lib Dems have already said they would cut taxes for lower paid people and have challenged the two main parties to "put their money where their mouths are" when it comes to tax pledges.

Economic recovery will work better if we all work together Gordon Brown Brown faith in US alliance

Mr Brown has said that any potential tax changes are a matter for the pre-Budget report, expected next week.

In his annual speech at the Lord Mayor's Banquet, Mr Brown said that "people are looking to governments for action" in helping them through the troubled economic times.

He drew attention to planned fiscal stimulus packages in Germany and the US as well as China's move to pump $600bn in its economy, all aimed at encouraging people to spend more.

"With Britain continuing to lead the debate, economic recovery will work better if we all work together," he said.

"The benefits of any individual country's fiscal action will be all the greater if this is part of a concerted and fairly distributed international response to maintain global demand."

The BBC's Nick Robinson said Mr Brown was dropping hints that he would be prepared to borrow more to fund tax cuts but that nothing was certain until the details were confirmed.

Asked about possible tax cuts earlier in the day, Mr Brown said petrol duty had been frozen and people were already getting