British Chancellor of the Exchequer George Osborne on Thursday rejected suggestions by the International Monetary Fund that he should lessen the pace of his government\'s austerity programme. The IMF\'s chief economist Olivier Blanchard said earlier Thursday that with Britain at risk of falling back into recession, the annual budget due in March would be a good time for Osborne to take stock of the measures. But Osborne said at the World Economic Forum in Davos that he was committed to cuts through 2017 in order to reduce Britain\'s record deficit, and said it was necessary to keep the country\'s credit rating high. \"I don\'t think it\'s right to abandon a credible deficit plan. Credibility is very hard won and easily lost,\" he said. \"I\'m afraid we\'re not about to bring that programme (of cuts) to an end, we have set out to the year 2017 a programme of deficit reduction.\" Blanchard\'s comments -- on the eve of data set to reveal that Britain\'s economy contracted in the final quarter of 2012 -- put fresh pressure on Prime Minister David Cameron\'s coalition government to abandon its so-called Plan A. \"We\'ve never been passionate about austerity,\" Blanchard told BBC radio, one day after the IMF also downgraded its growth outlooks for Britain. \"From the beginning we have always emphasised that fiscal consolidation should be slow and steady,\" said Blanchard. But Osborne said that despite the unpopularity of austerity in Britain and the sluggish economy, he would not change course. \"We are walking a difficult road but we are walking in the right direction,\" Osborne said. The Chancellor of the Exchequer also backed Cameron\'s plan to hold a referendum on Britain\'s membership of the European Union by the end of 2017, dismissing suggestions that it might put off investors. Asked how likely it was that Britain would leave the 27-nation bloc, Osborne said: \"Our argument is a positive argument, that Europe needs to change to meet the aspirations of all its peoples, whichever country they live in. \"Obviously we also make the argument on behalf of the British people that Europe has to become a competitive place,\" he said. Cameron\'s government has repeatedly blamed the three-year-old crisis in the eurozone, its biggest trading partner, for the poor performance of the economy in recent years. Britain sank into the first phase of a double-dip recession in 2008 as a result of the devastating global financial crisis that sparked a number of vast banking bailouts. The economy rebounded in late 2009 but struggled to stage a convincing recovery and fell back into a second downturn in late 2011, as the eurozone crisis loomed large.