The Chancellor on Monday commissioned an Office for Budget Responsibility (OBR) forecast, which will be presented alongside the budget. Mr Hunt told MPs he will deliver a Budget on March 15 next year.

In a written statement, he said: “Today I can inform the House that I have asked the Office for Budget Responsibility (OBR) to prepare a forecast for March 15, 2023 to accompany a Spring Budget.

“This forecast, in addition to the forecast that took place in November 2022, will fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.”

Jeremy Hunt who will set out a Spring Budget on March 15, 2023, the Treasury has said. Picture: Stefan Rousseau/PA Wire

Mr Hunt delivered his first budget as Chancellor last month, as the Government sought to restore the UK’s economic credibility following Kwasi Kwarteng’s disastrous mini-budget.

The Chancellor’s last budget saw Mr Hunt set out a series of “difficult” decisions designed to ensure a “shallower” recession for the UK, amid a backdrop of the war in Ukraine, soaring energy bills and the economic turmoil that spelled the end of Liz Truss’s short-lived administration.

In November, the OBR forecast unemployment would rise by 505,000 from 3.5 per cent, to peak at 4.9 per cent in the third quarter of 2024.

Inflation was expected to be 9.1 per cent over the course of this year and 7.4 per cent next year, contributing to a dramatic fall in living standards.

With plans for almost £25 billion in tax increases and more than £30bn in spending cuts by 2027/28, the OBR said then the tax burden – the ratio of taxes as a share of gross domestic product (GDP), a measure of the size of the economy – would peak at 37.5 per cent in 2025/26, “which would be its highest level since the end of the Second World War”.

Rishi Sunak and his chancellor faced a backlash from some Tory MPs over the tax-rising budget even as economists questioned the credibility of the planned spending cuts, many of which have been pushed back past the next general election.

Confirmation of the Spring Budget comes as the UK economy is on track to shrink by 1.3 per cent in 2023 amid a recession that is set to last until the end of next year, according to a new economic forecast.

Economists at KPMG have predicted the UK has already entered a “shallow, but protracted” recession amid continued inflation and higher interest rates.

Yael Selfin, chief economist at KPMG UK, said increases in food and energy costs this year had dragged back households’ spending power. KPMG predicted the country entered recession in the third quarter of this year.

Official figures from the Office for National Statistics showed the economy shrank by 0.2 per cent in the third quarter, between July and September. A technical recession is defined as at least two consecutive quarters of contraction.

Earlier this month, the Bank of England increased interest rates to a 14-year high of 3.5 per cent. They are expected to reach at least 4 per cent by next spring.

Jeremy Hunt Budget: Chancellor to set out Spring Budget in March

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