David Cameron has admitted his austerity programme could last until 2020, meaning Britain could endure a decade of squeezed public spending.
Upon coming to power in 2010 the prime minister and George Osborne had hoped that their five year programme of public spending cuts could be completed in time for their 2015 re-election campaign.
However the chancellor was forced to extend his austerity measures until 2017, scuppering hopes that both the Tories and Lib Dems could go to the polls with a more positive message.
Asked by the Daily Telegraph on Thursday whether the austerity programme could last for ten years he replied: “This is a period for all countries, not just in Europe but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts."
"I can’t see any time soon when the pressure will be off. I don’t see a time when difficult spending choices are going to go away," he said.
He added: "But I don't deny for a minute that it is a lot tougher than the forecasters were expecting."
On Thursday afternoon the International Monetary Fund warned that Osborne's austerity measures may need to be rethought.
A report on the UK economy, said: “The planned pace of structural fiscal tightening will need to slow if the recovery fails to take off even after additional monetary stimulus and strong credit easing measures.”
Rachel Reeves, Labour’s shadow chief secretary to the Treasury, said Cameron's comments were a "significant admission from David Cameron that his economic plan has failed".
"He and George Osborne told the British public that deeper and faster spending cuts and tax rises would secure the recovery and balance the books by 2015," she said.
"But the Government's reckless policies have delivered a double-dip recession and rising long term unemployment, which is why borrowing is now going up.
"Instead of shrugging his shoulders and accepting things will just get worse, David Cameron should be taking urgent action to get the economy moving again.
She added: "We need a change of course and a real plan for jobs and growth to get the deficit down and prevent long-term damage being done to our economy."
Ann Pettifor, the director of Policy Research in Macroeconomics (PRIME), has said the government’s economic strategy "is in tatters".
Writing on The Huffington Post she said: "On the one hand the Chancellor, the Rt. Hon. George Osborne has just offered assurances to the private sector that the British taxpayer will guarantee £50bn of new infrastructure investment and exports.
"On the other, the coalition’s deficit reduction programme has largely been implemented by – wait for it – massive cuts in infrastructure investment."
While Ruth Porter, the communications director at the Institute of Economic Affairs, told The Huffington Post that the government needs to work harder on eliminating the deficit.
"Public spending is around 47% of GDP and the deficit this year alone is forecast to be around £92bn. With a national debt already over £1 trillion, by the end of this Parliament it will be around £1.5 trillion," she said.
"The government has increased taxes to try and begin to close the deficit and has also made minor spending reductions – but the size of these has been woefully inadequate."