The chancellor faces the edge of a triple-dip recession, failed deficit targets, increased borrowing, growing domestic inequality, low investment, hardship among the poorest and a rise in unemployment as he announces his budget today (20 March).
However, despite negative assessments of his austerity policies from the IMF, Bloomberg, Nobel Prize winning economist Paul Krugman and many others, George Osborne has indicated that he will not change direction.
He has pledged to make a further £2.5 billion public sector cuts, even though the main problem is financial and private debt and these reductions have been shown to worsen the economic situation by reducing demand and capacity.
Meanwhile, the Office for Budget Responsibility (OBR) is set once again to downgrade its already minimal growth forecasts.
The chancellor says he will invest savings in capital spending to boost production, but critics point out that the amounts he is proposing remain insignificant.
Further bad news came ahead of the budget when it was announced that unemployment rose by 7,000 to 2.52 million between November 2012 and January 2013, according to official figures.
The government points to the record number of people in employment in the UK, but others point out that this is due to a record overall population level, that the GDP to employment ratio has fallen, and that many jobs counted are part-time, insecure or seasonal.
Under Mr Osborne's latest cuts, government departments such as environment, energy, transport and justice will have to find additional one per cent annual savings in regular resource budgets on top of swingeing cuts of up to 25 per cent already imposed on them.
The one per cent reductions will be reflected in the central government funding arrangements for Scotland, Wales and Northern Ireland, who will all be squeezed further.
The government is also pressing ahead with its massive reductions in welfare and benefits, targeting the poorest in society and seeking to drive a wedge between so-called 'strivers' and 'shirkers'.
But a major report from several of Britain's churches, The lies we tell ourselves: ending comfortable myths about poverty (http://www.ekklesia.co.uk/node/18086) has illustrated that the political and economic attack on the most vulnerable is based on perpetuating falsehoods rather than on solid analysis.
In a piece of positive news for the low paid, who have been significantly worse off in recent years, the chancellor is expected to announce that moves towards a tax-free allowance of £10,000 will be brought forward from 2015 to 2014.
Critics also say that overall, under coalition policies since 2010, Britain has been going through lowest rate of recovery from the last recession since Great Depression in the 1930s, and now risks slipping back into negative growth.
In addition, as a result of austerity, every family in the country is nearly £1,400 worse off on average (with the poorest being disproportionately hit, and the wealthiest getting tax cuts), while public borrowing has gone up by £60 billion in spite of the government's claims to be reducing it.
Trades Union Congress (TUC) General Secretary Frances O'Grady commented: "With the economy stagnating, the pressure is on the Chancellor to deliver a pro-growth Budget.
"But spending just £2.5 billion a year more on infrastructure projects will boost growth by a measly 0.06 per cent. Worse still, funding it through departmental spending cuts will mean further reductions in public services.
"With interest rates negative in real terms, the Chancellor has the perfect opportunity to invest in Britain's future, rather than raiding departmental budgets to cover his failed economic strategy."
Chris Leslie MP, shadow Treasury minister, commented: "An increase in capital spending of just £2.5 billion compares to deep cuts of £12.8 billion to infrastructure investment in the last three years ... If this is the only additional investment in infrastructure in the budget it will be a huge disappointment.
"The test for the budget is whether it delivers bold action to kickstart our flatlining economy and significant tax cuts for middle and low-income families, not a £3 billion tax cut for the very richest and more of the same failing policies."