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David Cameron has insisted he will not back down over public spending cuts during noisy House of Commons exchanges with Labour leader Ed Miliband.

The prime minister played down the impact of bad weather on the surprise contraction in the UK's economy.

But he told MPs the recovery would be "choppy" but "the worst thing to do would be to ditch your plans on the basis of one quarter's figures".

Mr Miliband accused him of "arrogance" for refusing to change economic course.

As the pair clashed at Prime Minister's Questions, Mr Cameron insisted the deficit inherited from Labour needed to be tackled and claimed Mr Miliband's alternative was to borrow more and "spend money on things we can't afford".

On Tuesday, ministers blamed the snow and exceptionally cold weather in the UK in December for a shock 0.5% contraction in the economy in the final three months of 2010.

But Mr Cameron admitted the figures were "disappointing even when you have excluded what the Office for National Statistics say about the extreme weather".

He added: "This country does have a very difficult economic situation for two main reasons. First of all, we have the biggest budget deficit in Europe and we have to get to grips with that and that is difficult.

"And second, we had the biggest banking boom and the biggest banking bust anywhere in Europe, and we have to deal with that.

"Inevitably, as you recover from those things it will be choppy and it will be difficult, but the worst thing to do would be to ditch your plans on the basis of one quarter's figures."

But Mr Miliband hit back by claiming Mr Cameron's programme was "hurting but it's not working" and he urged the prime minister to change course.

"Why don't you just for once put your arrogance aside and admit you know how to cut jobs but you have absolutely no idea how you are going to create them?" he told Mr Cameron.

He claimed planned spending cuts would take a further £20bn out of the economy this year - and he urged Mr Cameron to come up with a "credible" plan to boost economic growth.

The Labour leader asked Mr Cameron: "What the country want to know from you, as millions of families and businesses are worried about their livelihoods, they see unemployment rising, they see inflation rising and they see growth stall, are you going to change your strategy in any way in order to get the economy moving?"

Mr Cameron cited a report by the Organisation for Economic Co-operation and Development - a global economic think tank - which he said backed the coalition's policy.

And he taunted Mr Miliband and his new shadow chancellor Ed Balls for being at the Treasury during a period of economic "boom and bust" - and accused the Labour leader of promoting the "risible" theory that Labour had left behind a "golden inheritance".

The clash comes amid further raft of gloomy economic news.

Bank of England governor Mervyn King warned inflation was likely to rise further to 4-5% in the coming months, while new figures suggested the number of mortgages approved for house buyers by the UK's main banks fell by 10% in 2010.