There were warnings tonight that the toughest budget in decades could plunge Britain back into recession, leaving the private sector unable to create the jobs needed to make up for public sector cuts.

Several commentators criticised the relatively optimistic outlook from the independent forecaster, created to remove the temptation for government to massage the figures for political ends.

"The chancellor could hardly have asked for more had he and his Treasury team stuck with tradition and come up with the forecast themselves," said John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development (CIPD).

"One suspects, however, that the forecast outlook will prove too good to be true. The fiscal squeeze both at home and across the eurozone will curb the demand for the goods and services that ultimately drives business investment and exports. Economic growth will slow by far more than the budget suggests and, rather than peaking at 8% this year, unemployment will continue to rise towards 3 million (10%) by the time Mr Osborne's measures take full effect."