The UK's reputation has taken "a bit of a knock" this year, Rishi Sunak has admitted, as he vowed to restore economic stability.
Speaking to the BBC from the G20 summit in Indonesia the prime minister said tax rises and spending cuts in Thursday's autumn statement were needed to reduce rising inflation and UK public debt.
Critics of his approach fear it could worsen a predicted two-year recession.
But Sunak said decisions would be taken in a "fair" way, and everyone would benefit from reduced debt levels.
Sunak said reducing inflation was his "number one challenge" adding it was important to "limit" mortgage repayments for homeowners, which have risen in the wake of September's mini-budget.
"The best way to do that is to get a grip of our borrowing levels, and have our debt on a sustainable basis falling," he added.
Meanwhile, a former rate setter at the Bank of England has blamed Brexit for the financial difficulties faced by the government.
“The UK economy as a whole has been permanently damaged by Brexit,” Michael Saunders, who was an external member of the central bank’s monetary policy committee, said in an interview with Bloomberg TV.
“It’s reduced the economy’s potential output significantly, eroded business investment,” he said, adding: “If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week.”