Chancellor George Osborne insists the Conservatives can still defy the odds and win the Rochester and Strood by-election.

Mr Osborne was in Strood today visiting Masterhitch, a company that makes parts for diggers that is based on the Medway City Estate.

His appearance on the campaign trail co-incided with a warning from David Cameron that “red warning lights” were once again flashing over the state of the global economy.

With just three days to go before polls open, the candidates are gearing up for a final blitz of campaigning in an election that is likely to have profound effects across the political landscape.

The odds are on a victory for Ukip, with its candidate Mark Reckless poised to become the party’s second candidate.

Mr Osborne said: “The short answer is yes, we can win. If people focus on the fact that this really is a two-horse race and if they focus on the fact that in Kelly, we have a strong local voicewho will fight for the people in Rochester. The alternative is a party that can’t deliver, then I think we can win.We have to work very hard over the next three days to get that message across.”

He said David Cameron was right in his analysis of the global economy.

“There is news round the world that should set red lights glowing across the dashboard because Japan has just gone into recession; we know that the continent of Europe is very weak and while Britain is not immune from the impact of those things, nor are we powerless to do anything about it. We have a long-term economic plan that has delivered 6,000 more jobs in Rochester and Strood.”

He added that meant the UK was well-placed to deal with “everything that was thrown at us” and was growing more strongly than the rest of the world.

David Cameron said weak growth in Europe, a slowdown in Asia and conflicts around the world had created a “dangerous backdrop of instability”.