Gordon Brown said the US and UK had "shared values"

In a speech to the CBI conference in Birmingham, Gordon Brown said that trading with the US was vital for the EU to prosper.

He praised the US for responding promptly to the economic recession.

And he also announced a new study of how the US and Europe could reduce trade barriers further.

Mr Brown delivered his customary steamroller performance, underlining his remarks with an array of remarkably aggressive hand gestures Analysis: Brown and Snow at the CBI

The World Trade Organisation (WTO) ruled last week that US tariffs on steel imports broke international trade rules and the EU could respond with its own sanctions.

But the chancellor was keen to emphasise the common ground between the two sides.

Liberty and opportunity

"We know that damaging trade and regulatory disputes between Europe and the USA have hindered commerce and damaged transatlantic relations," he said.

"It is time now for us all to make the effort to move beyond them."

Mr Brown said that the UK and US share a common belief in liberty and opportunity, the work ethic and enterprise, and a commitment to openness rather than isolationism.

Our message will remain stability first: today, tomorrow and always Chancellor Gordon Brown

He said that economic expansion through free trade and free markets was the key to growth and prosperity, and he has announced a new study of how the US and Europe could reduce trade barriers further to their mutual benefit.

The new US-UK Enterprise Pact will promote a study to outline benefits of fairer trade between the two countries.

It will also provide extra scholarships for young British entrepreneurs to study in the US.

"It is a reflection of our shared values that we are deepening our relationships today," Mr Brown said.

Domestic pledge

The chancellor used this speech to support the recent move by the Bank of England to raise interest rates to 3.75%.

Major world economies - particularly Japan, Germany and France - are operating well below their potential John Snow, US Treasury Secretary

He said the Bank was "right to take the forward-looking approach of pre-emptive action as the economy strengthens to lock in stability".

On domestic issues, Mr Brown promised business leaders that he would stick to his tough targets for fiscal responsibility and that stability is the key.

"Our message will remain stability first: today, tomorrow and always."

And he said that government should concentrate on what it can do best, such as building up a skilled workforce, while staying out of the way and reducing regulation in other areas.

Global growth 'uneven'

US Treasury Secretary John Snow, who addressed the conference after Mr Brown, noted that the UK had shown "consistent" growth during the recent global slowdown.

He said that while the US economy was beginning to recover, it was still early days and "we have no intention of resting on our laurels".

But he urged other regions in the global economy to pull their weight.

"As we look at the global economy today, it is hard to escape the conclusion that growth has been far too uneven - particularly in the largest industrial nations," he said.

"Britain has demonstrated consistent growth, but the other major world economies - particularly Japan, Germany and France, are operating well below their potential."