Government debt has increased by £555 billion since George Osborne took office in 2010, the latest official figures show.

The Office for National Statistics said this week the Government had borrowed £70.7 billion pounds in the first 11 months of the current financial year.

Barring a major last-minute turnaround before the year ends next month, the Chancellor is likely to borrow more than his forecast for this year of £72.2 billion.

With inflation at zero and growth rates far from booming the Government is yet see real public debt falling as a percentage of the economy – the most important measure for assessing the public finances.

The Office for Budget Responsibility – the Government’s spending watchdog – cut its growth and deficit reduction forecasts in new projections revealed in the Budget a week ago.

The fiscal watchdog, which is in charge of official economic forecasts, said GDP would actually only grow by 2 per cent instead of 2.4 per cent in 2016.

As a result, it also increased the Chancellor's forecast borrowing in 2018-19 by £16 billion – a significant set-back in his drive to cut debt.

Growth rates were downgraded in each of the next four years after that, with 2017 growth down from 2.5 per cent to 2.2 per cent and 2018 growth at 2.1 per cent from 2.4 per cent .

The OBR said productivity growth had not recovered from the economic crisis at the rate it had previously expected it to.

It also warned that the world economic outlook was slowing.

Labour's shadow chancellor John McDonnell says the Government is going about deficit reduction the wrong way (House of Commons)

The Chancellor is targeting a surplus instead of deficit by the 2020 general election and says his latest Budget has put the economy on course to do so.

He was however dealt a further blow this week when he was forced to climbdown on £4.4 billion of spending cuts to disability benefits – after the resignation of the Work and Pensions Secretary Iain Duncan Smith.

George Osborne 2016 budget at a glance Show all 8 1 /8 George Osborne 2016 budget at a glance George Osborne 2016 budget at a glance Debt forecasts up, growth forecasts down The OBR’s new forecasts have downgraded growth in all of the next five years to 2020. The watchdog says the economy will only grow by 2 per cent in 2016, as opposed to the anticipated 2.4 per cent. Borrowing and productivity growth are also down – with forecast borrowing in 2018-198 £16 billion higher George Osborne 2016 budget at a glance New tax on sugary drinks The Chancellor announced a new tax on sugary soft drinks, which is projected to raise £520 million. At least some of the money will be spent on doubling funding for school sport, the Chancellor says. Labour leader Jeremy Corbyn welcomed the levy George Osborne 2016 budget at a glance Tax cut for higher earners paying the 40p rate The Chancellor has raised the threshold for paying the higher rate of income tax to £45,000. The higher rate is paid by roughly the richest 15 per cent, currently people earning over £42,386 George Osborne 2016 budget at a glance Increase in tax-free income tax threshold The tax-free allowance increase to £11,500 in April 2017 – up from £10,600 now. The Chancellor previously raised the allowance from £6,475 in coalition with the Liberal Democrats. The Conservative manifesto pledges to put the allowance up to £12,500 by the end of the Parliament George Osborne 2016 budget at a glance New devolution for counties and powers for London and Manchester The West of England, the East of England and Greater Lincolnshire will all get elected mayor-led combined authorities with new powers. The Chancellor says they are backed by £1 billion new funding. Greater Manchester will get new powers of criminal justice while London will keep its business rates – giving whoever is elected Mayor a lot more spending power George Osborne 2016 budget at a glance Fuel duty frozen for sixth year running The Chancellor had planned to end the fuel duty freeze he had put in place for the whole previous parliament. In the event, he has announced a freeze for another year George Osborne 2016 budget at a glance All schools to become academies As reported yesterday the Chancellor unveiled legislation to turn all schools into academies. He said all schools would either be academies or on their way to being academies by 2020, and that funding had been set aside to fund the change George Osborne 2016 budget at a glance Lifetime ISA The Chancellor announced a new savings account to encourage under-40s to save for retirement – for every £4 saved, the Government will top this up by £1 up to the value of £4,000 a year. Tax-free ISAs will also be increased from £15,000 to £20,000

Despite the continued increase in public debt and limited progress on deficit reduction, Mr Duncan Smith accused the Government of balancing the books on the backs of the most vulnerable in society.

A distributional analysis of Mr Osborne’s latest Budget shows that it benefits the richest the most – and the poorest least.

Labour accused Chancellor of leaving a “hole” in spending plans because of the U-turn – as well as two other on VAT for women’s sanitary products and solar panels.