Autumn Statement: Chancellor predicts 2.4% UK GDP growth in 2015

Looking ahead, Osborne said the economy is predicted to grow by 2.5% in 2016-17, falling to 2.4% in 2017-18 and 2.3% in 2019-20.

Describing the eurozone as a "persistent problem", Osborne said there were "yet more reasons" to protect the UK's economic security.

The new measure of net debt was forecast in July to be 83.6% of GDP, but citing the Office for Budget Responsibility, Osborne said this is now forecast at 82.5%, falling every year, down to 81.7% in 2016, and reaching 71.3% in 2020-21 on current projections.

The chancellor also said the UK would borrow £8bn less than forecast "fixing the roof while the sun is shining." It will also allow the government to "reach a surplus while cutting less" in the early years, he added.

Analysing the statement, Capital Economics said a "surprising" improvement in the OBR’s public borrowing forecasts had saved the Chancellor’s bacon, with “modelling changes” seemingly boosting tax receipts and allowing him to scrap his controversial tax credit cuts while still adhering to his fiscal rule to achieve a surplus in 2019/20.

"Abstracting from the impact of bringing housing association borrowing into the public sector, borrowing is some £27bn less than expected over the parliament as a whole, and £8bn per annum less by 2020/21. Even taking into account the housing association change, the forecast for annual borrowing in 2020/21 has fallen by about £3bn."

Ian Stewart, chief economist at Deloitte, said the Chancellor appeared to "achieve the impossible", thanks to revenue-raising measures, especially a new Apprenticeships Levy, and the "game changer" of the OBR's more optimistic view on prospects for tax receipts.

“Decent UK growth and a better outlook for tax receipts have saved the day - enabling Mr Osborne to cut less and shrink the deficit much as planned.”