Gordon Brown insisted he "recognised" the financial difficulties facing families today as fears grew over the perilous state of Britain's economy.
But the Prime Minister said he was determined to make the right "long-term" decisions for the country rather than those which brought short-term popularity.
"What people would not thank me for is taking the wrong long-term decisions," he told Sky News.
"The right long-term decisions are to keep inflation low and keep interest rates low."
Mr Brown's comments came after he held talks with bankers in Downing Street over how to minimise fallout from the global credit crunch.
Number 10 said they discussed the "next steps" in securing the financial system amid evidence of a sharp slump in property prices.
The Government is also under pressure to help people deal with rising costs of key commodities - such as food and fuel.
There was slightly better news for Mr Brown when inflation figures showed the official rate held steady at 2.5 per cent last month - rather than rising as many had expected.
However, David Cameron launched a searing attack on the Prime Minister for being "arrogant" and "out of touch".
The Tory leader said the Government had wasted money "on a gargantuan scale" in the past decade, when it should have been preparing for leaner times.
Mr Brown said the Government would do everything in its power to help ordinary people.
"I'm not complacent and I will always be vigilant," he said.
"I wake up in the morning thinking what can we do to help homeowners, to help those people who have got small businesses, people looking for jobs, people wanting opportunities so they can have better jobs for the future.
"What can we do to help people who are worried about the impact of what is a global credit crunch that people understand started in America and is impacting on Britain.
"And we will do everything in our power to make sure we're on the side of ordinary hard-working families who need a government on their side, that we will take the action necessary."
Asked about grumblings within the Labour ranks about his leadership, the Prime Minister.
"I'm a person who has set the Labour Party on a course of making the long-term decisions for the future of our country.
"Of course when we have an economic downturn affecting Britain, people will immediately start asking what more the Government could have done.
"I think we now are taking the actions that are necessary, we are looking at further measures to help people in this difficult situation.
"And I've been through these economic difficulties before and I think eventually people do see you are trying to do the right things by them."Reuse content