Chancellor George Osborne is expected to tell business leaders that the Government is prepared to stick to its economic course, saying, "Now is not the time to lose our nerve ... Our plan is working".
As he addresses the CBI annual dinner at Grosvenor House tonight, Mr Osborne will say that spending more to rejuvenate the UK's fortunes is "patently ludicrous" and would set the recovery back
He is also set to rubbish Labour's calls for a temporary VAT cut, claiming the figures do not "stack up".
The Chancellor is expected to say: "My message to the business community and to the country is this - we have a clear economic plan.
"Our plan is working. Now is not the time to lose our nerve. Let's not listen to those who would take us back to square one.
"Let's carry on doing what is right for Britain, let's see this through".