David Cameron has admitted he cannot envisage a time when the austerity programme will end and failed to rule out spending cuts lasting until at least 2020.
The Prime Minister welcomed falling inflation as a good sign but admitted the economic crisis had been far worse than expected and could blight Britain for years.
Mr Cameron, in an interview with The Daily Telegraph, said: "This is a period for all countries, not just in Europe (Chicago Options: ^REURUSD - news) but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts.
"I can't see any time soon when the pressure will be off."
He added: "I don't see a time when difficult spending choices are going to go away. We are in a very difficult situation. There is some good news, we've just seen inflation fall again.
"But I don't deny for a minute that it is a lot tougher than the forecasters were expecting.
"We've had one of the longest and deepest recessions for decades in Britain. It was an incredibly tough set of circumstances and it has proved very hard to get out of those situations.
"But I think the plan we have has given people confidence that the Government has a grip and knows what needs to be done."
The initial austerity programme launched by the coalition was supposed to end by 2015, when the Tories and Lib Dems were hoping to claim they had turned around the economy.
It was extended to 2017 by Chancellor George Osborne last autumn because of ongoing problems, which have now seen the UK economy slip back into recession.
Cabinet Secretary Sir Jeremy Heywood warned last month that the fiscal reform challenge facing public services across the board could stretch as far as 2020.
In his interview, Mr Cameron insisted the continued need for belt-tightening did not rule out the possibility of tax cuts.
"You can do exciting and radical and Conservative things at the same time as having difficult overall spending choices," he said.
A new poll has suggested that public confidence in the coalition to deal with the economic crisis has more than halved since it came to power to just 28%.
However, the Prime Minister said he did not believe people had made up their minds.
He said: "I think the sense I get from people is, 'Look (Munich: 867225 - news) , I know you've got to cut public spending, I know you've got to get the deficit down, I know you've got to make sure our businesses are competitive. I know you've got to do all these things, but I want to know that as we get out of this mess, it won't be the same group of people that benefited in the past.
"There won't be a splurge of public spending, mass immigration, wasted money on welfare, bankers paying themselves enormous salaries when they're not delivering safe and effective banks. I want to know that in future a hard day's work means a hard day's pay'."
Labour leader Ed Miliband criticised Mr Cameron, claiming his warning was further "grim" news for an already-struggling public and that he should instead be focused on taking action.
"The Prime Minister simply telling people that there is nothing on the horizon and they are going to carry on as they are not only says something about his approach but it is not good for confidence either," he said.
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