George Osborne's claim to an economic victory over Labour will come under intense scrutiny today amid warnings that Britain is "still in a big hole".
Verdicts on the Chancellor's plan to get Britain back in the black by 2018 will be delivered later by key experts including the respected Institute for Fiscal Studies (IFS) think-tank.
Mr Osborne delivered a more upbeat Autumn Statement yesterday than in previous years and claimed critics of his austerity programme have been "proved comprehensively wrong".
But Labour insisted that the economic revival was not being felt in people's pockets and the IFS warned there is "an awful lot of austerity still to come".
Office for Budget Responsibility forecasts upgraded growth to 1.4% this year - more than double the level expected at the time of the Budget in March - and 2.4% in 2014, and revised down expectations for state borrowing by a total of £73 billion over the next five years.
"Thanks to the sacrifice and endeavour of the British people, I can today report the hard evidence that shows our economic plan is working," the Chancellor said
But he warned that "the job is not yet done" and laid out further saving measures, including £3 billion cuts in public sector spending, a new cap on the overall welfare bill and an increase in the state pension age to 68 in the mid-2030s and 69 in the late 2040s - sparking union protests that ministers expected young people to "work until they drop".
Labour rejected the Chancellor's claims of success and pointed to figures suggesting that working people were an average £1,700 a year worse off since the 2010 election because of prices rising faster than wages.
"There has not been a Parliament in living memory where we have had a fall in living standards like this," shadow chancellor Ed Balls said. He branded Mr Osborne an "out-of-touch Chancellor" who was "in denial" about the state of the economy.
The UK economy has grown by just 2.5% since Mr Osborne's first spending review in 2010, rather that the 7.7% forecast at the time, while the Government will have borrowed £198 billion more by 2015 than it planned when it came to office, Mr Balls added.
The OBR warned that improvements to the fiscal outlook were "cyclical rather than structural" and noted that higher-than-expected growth this year has been fuelled by consumer spending and rising house prices, rather than business investment and trade.
IFS director Paul Johnson told the BBC: "We are still in a big hole. We are still borrowing a lot more than £100 billion this year which is a lot more than the Chancellor hoped back in 2010. There is an awful lot of austerity still to come."
Mr Osborne unveiled measures to help young people into work, scrapping employers' national insurance contributions for under-21s, in a move which the Treasury said would affect 1.5 million jobs.
Business rates will be capped at 2% from April 2014 and £1,000 will be knocked off rates for small shops, pubs and cafes in the UK's high streets.
Mr Osborne angered environmentalists by announcing a new allowance to encourage investment in shale gas.
And he said fuel duty would be frozen again next year, as he cancelled the final 2p-a-litre rise pencilled in by Labour. Meanwhile, rail fares will rise in line with inflation in January, rather than the planned inflation plus 1%.
As expected, he gave married couples a boost by bringing in a £1,000 tax allowance transfer and Capital Gains Tax will be applied to residential properties sold by owners who are not resident in the UK.
Mr Osborne said the improving economic outlook meant borrowing would be £111 billion this year - £9 billion less than predicted at the time of the Budget in March.
He revealed that the recession had been even deeper than feared - with GDP down by 7.2% rather than 6.3%, the equivalent of £3,000 per household and one of the sharpest falls globally.
But he said that UK plc was now growing faster than any other advanced economy, winning Tory cheers with his declaration: "Britain's moving again; let's keep going."