This means the country experienced a technical recession last year due to the country seeing two consecutive quarters of negative gross domestic product (GDP) growth.

New forecasts following this recession shock suggest the soaring cost of managing public debt mean Mr Hunt has less fiscal headroom in the Budget to cut taxes than originally thought.

Speaking to The Telegraph, a source from The Treasury said: “The world has changed. Everything you thought was going to happen [at the Budget] may now not happen.”

Reacting to the GDP figures yesterday, the Chancellor defended Prime Minister Rishi Sunak’s record when it comes to the economy.

“When the Prime Minister made his commitment he was very clear that tackling inflation had to come first… If we stick to our guns now, we can actually see light at the end of the tunnel,” Mr Hunt said.

The Chancellor denied failing to prepare for, or inform the public, that the UK economy was at risk of contracting.

He added: “That’s not true. When I did the autumn statement just after I became Chancellor, the forecasts were that the economy will contract by 1.5 per cent in the next year.

“We stood behind those forecasts, and this is a Prime Minister who sticks to his plan when the data is encouraging, or even when it’s challenging like today.”