The International Monetary Fund (IMF) today put pressure on George Osborne to change economic course in a critical assessment of the state of the British economy.
Prospects for growth remain weak and the UK is "still a long way from a strong and sustainable recovery", according to its annual economic health check.
The IMF said there encouraging signs of some improvement in conditions, pointing to "notably strong" growth in private sector employment, increased demand for vehicles, and improvements in business and consumer confidence.
Despite recent improvements, however, Britain's GDP remains 6% below pre-crisis levels "making this the weakest recovery in recent history".
Earlier this month, the chancellor insisted the government's plan was working and there would be no change in direction.
And despite today's less than rosy report, the IMF appeared to significantly soften it's criticism of the chancellor. In April, its chief economist Olivier Blanchard said Osborne was "playing with fire" with his fiscal policy.
Osborne told a press conference to launch the report at the Treasury: "Britain will not duck its economic challenges. We will not avoid the difficult choices we need to make to have a more balanced and sustainable economy that delivers prosperity for our country.
But shadow chancellor Ed Balls said the IMF team, which has been based in the Treasury for two weeks, while carrying out its review, was simply using "diplomatic language".
“The IMF is clear that we are a long way from the strong and sustained recovery we need and backs the warnings we have made for three years that the Government’s plans are a drag on growth and risk doing long-term damage," he said.