Just days after being forced into an embarrassing u-turn over national insurance hikes, it is feared Philip Hammond will borrow tens of billions of pounds more than predicted over the coming years, leaving a fresh hole in the nation’s finances.

Forecasters across the City of London believe the Office for Budget Responsibility’s deficit forecasts are too optimistic and risk leaving a £7.1bn hole in the Chancellor’s plans next year. If the weaker fiscal performance continues, the national debt could grow by an additional tens of billions of pounds over the coming years.

Mr Hammond’s spending plans are based on OBR estimates that borrowing will fall sharply next year, dropping from £58.3bn in 2017-18 to £40.8bn in 2018-19.

Instead borrowing is set to shrink far more slowly to £47.9bn in 2018-19, according to independent forecasts compiled by the Treasury.

Last week, Mr Hammond’s tax plans hit the skids when he cancelled a proposal to raise national insurance contributions for self-employed workers after a backlash from small businesses and MPs. The u-turn leaves a £2bn hole in the Chancellor’s finances over the next five years.