Chancellor Jeremy Hunt was warned against another brutal era of austerity in next week’s Budget while Britain is on the brink of recession.
The economy shrank by 0.2% between July and September amid the cost of living crisis.
Another three months of falling growth would mean a recession, with the Bank of England warning it could be the longest downturn for a century.
Mr Hunt and PM Rishi Sunak met again yesterday to nail down £21billion in annual tax rises and £33billion of spending cuts by 2027/28.
They were told not to repeat the “mistakes” in 2010 of former PM David Cameron and ex-Chancellor George Osborne.
TUC General Secretary Frances O’Grady said: “The Tories crashed the economy and now the country is on the brink of recession.
“As the government prepares for the Autumn Statement, ministers need to act now to boost the economy.”
Thomas Pugh, of accounting firm RSM UK, warned the UK faced “austerity mark 2”.
Mr Hunt warned of “extremely difficult decisions to restore economic stability”.
His cuts could give him nearly half the £54bn savings he wants in Thursday’s budget and delay them until after the 2024 election.
Mr Hunt vowed to make a possible recession “shallower and quicker” than forecast.
Shadow chancellor Rachel Reeves accused No10 of leaving the economy exposed to rising costs, fuelled by the Ukraine war.
She said: “Today’s numbers are another page of failure in the Tories’ record on growth.” The Lib Dems’ Sarah Olney said Tories “can never again claim they are the party of sound money”.
The fall contrasts with growth of 0.2% in France and Germany.
