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The Government will miss its target of getting debt falling by 2015, George Osborne has told MPs.
Delivering his Autumn statement in the Commons, the Chancellor said he has been been forced to delay the target because of the worse than expected state of the economy.
The UK is "on course" to meet its fiscal mandate, he insisted, but warned it would miss its "supplementary objective" to have debt falling by 2015-16.
"The point at which debt starts to fall has been delayed by one year, to 2016-17," he told MPs.
"The OBR’s central forecast is that net debt will be 74.7% this year, then 76.8% next year.79.0% in 2014-15. 79.9% in 2015-16. Before falling to 79.2% in 2016-17 and 77.3% in 2017-18."
Rating's agency Fitch tonight said it would conduct a formal review of the UK's AAA rating in 2013, expressing concern that the Government missing its borrowing target "weakens" its fiscal credibility.
But Mr Osborne insisted a U-turn on austerity would be "a disaster" for the UK, and said the public know there "are no miracle cures".
"I do not want that to distract from the tough economic situation we face in the world. The public know that there are no miracle cures. Just the hard work of dealing with our deficit and ensuring that Britain wins the global race," he said.
"That work is underway. The deficit is down. Borrowing is down. Jobs are being created. It is a hard road. But we are making progress. And in everything we do, we’re helping those who want to work hard and get on."
Shadow Chancellor Ed Balls said the statement showed that the Government's economic strategy was "in tatters".
Mr Balls told MPs: "Our economy this year is contracting, the Chancellor has confirmed the Government's borrowing is revised up this year, next year and every year and the national debt is rising, it is not falling."
He added: "The defining purpose of the Government, the cornerstone of the Coalition, the one test they set themselves.. is now in tatters."
You can catch up with all today's developments with our Autumn Statement liveblog here.
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05/12/2012 on BBC News
05/12/2012 on BBC News
05/12/2012 on Newsnight, BBC 2
Summaries and transcripts from TV and radio
25/10/2014 on Today, BBC Radio 4