Theresa May is set to insist that a balanced approach to public spending is key in ensuring that the economy operates in the interests of working people.

In a speech marking 20 years of political independence of the Bank of England the prime minister will also champion a free market as the "greatest agent of collective human progress ever created".

Mrs May will say that a strong economy depends on controlling public spending.

"That means continuing to deal with our debts, so that our economy can remain strong and we can protect people's jobs", she is expected to say.

Mrs May will also say that the Conservative's "successful management of the economy" has enabled investment in "vital public services" to be made.

"To abandon that balanced approach with unfunded borrowing and significantly higher levels of taxation would damage our economy, threaten jobs, and hurt working people," she will say.

"Ultimately, that would mean less money for the public services we all rely on."

The speech is also set to explore how the nature of central banking has changed over the past 30 years with its new defining characteristics being "openness and transparency".

Theresa May, who started her professional life at the bank in 1977, will also mount a strong defence of free market capitalism.

She will stress the value of an open financial system which has the right level of regulation.

"A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created.

"It was the new combination which led societies out of darkness and stagnation and into the light of the modern age.

"It is unquestionably the best, and indeed the only sustainable, means of increasing the living standards of everyone in a country.

"And we should never forget that raising the living standards, and protecting the jobs, of ordinary working people is the central aim of all economic policy.

"Helping each generation to live longer, fuller, more secure lives than the one which went before them.

"Not serving an abstract doctrine or an ideological concept - but serving the real interests of the British people."