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Panicking George Osborne is to warn that the British economy could face rapid “decline” this year as he lays the ground for another Tory economic failure.

In a speech in Wales, the Chancellor will say 2016 could be the “beginning of the decline” for Britain and warned the economy is now “mission critical”.

After months of talking up the economy in the run-up to the general election, the hypocritical Tory will admit: “Anyone who thinks it’s mission accomplished with the British economy is making a grave mistake.

“2016 is the year we can get down to work and make the lasting changes Britain so badly needs... Or it’ll be the year we look back at as the beginning of the decline.

Read more: 'Tory Government's policies are a threat to Britain's business success' warns CBI

“Last year was the worst for global growth since the crash - and this year opens with a dangerous cocktail of new threats.”

It comes as Mr Osborne’s own Budget experts warned his spending plans are based on cash “found down the back of the sofa” which could disappear in the coming years.

In a withering verdict, Treasury watchdog the Office for Budget Responsibility (OBR) said yesterday the £27billion extra cash the Chancellor used in his Autumn Statement to avoid steeper cuts is actually “pretty small beer”.

OBR chief Robert Chote warned the extra spending is based on predictions of how much cash the Treasury will collect in tax over the next five years and could easily change – potentially meaning huge new cuts or tax cuts further down the line.

“Following the Autumn Statement, lots of people latched onto the £27 billion that we had apparently found down the back of the sofa over the next five years.

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“Unfortunately £27 billion is not as much as it sounds,” Mr Chote warned.

“What the sofa gives, the sofa can easily take away.”

His comments threatened to overshadow Mr Osborne’s speech’ today when he will warn of the perils facing the global economy.

“As we start 2016, I worry about a creeping complacency in the national debate about our economy,” the Chancellor will say.

(Image: Getty)

“We are only seven days into the New Year, and already we’ve had worrying news about stock market falls around the world, the slowdown in China, deep problems in Brazil and in Russia.

“Commodity prices have fallen very significantly. Oil, which was over $120 a barrel in 2012, now stands at less than $40.

‘That is good for consumers and business customers here in Britain, bad news for the oil and gas industry, worrying for the creditors who have lent to it, and a massive problem for the countries that depend on it.

“Meanwhile the political developments in the Middle East, with Saudi Arabia and Iran, concern us all.”

“The biggest risk is that people think that it’s ‘job done’.”