Osborne briefs Cabinet on statement

George Osborne has briefed Cabinet colleagues on his autumn statement to be delivered against a backdrop of what are expected to be gloomy official forecasts on jobs and growth.

Downing Street said the package had been agreed in the usual way by Conservative and Liberal Democrat sides of the coalition and was welcomed on those terms at the 90-minute meeting in Number 10.

Despite grim economic forecasts warning the UK is heading back into recession, the Chancellor is expected to insist the Government's tight spending controls have had "real benefits" for Britain, including bringing down debt interest repayments, saving the Treasury £20 billion over four years.

His statement will include a raft of reforms focusing on creating growth by targeting small businesses, as well as measures to boost infrastructure investment and help parents with childcare.

Mr Osborne's lunchtime statement to the House of Commons will be immediately followed by the release of economic and fiscal forecasts from the independent Office for Budget Responsibility which are expected to show the UK economy seriously under-performing.

A day after the Organisation for Economic Co-operation and Development (OECD) warned that the UK has already entered a period of recession due to stretch into the spring, the OBR is expected to forecast GDP growth of around 1% for both 2011 and 2012 - well under the 1.7% and 2.5% forecasts it made in March.

That sluggish growth will mean lower tax revenues and higher benefit payments for the Treasury, and all eyes will be on whether the OBR still thinks it is possible for the Chancellor to meet his promise of eliminating the structural deficit by 2015/16.

Labour leader Ed Miliband warned earlier that it was time for the Chancellor to change course: "I think what we are going to see today is unemployment is up, growth is down and borrowing, which was the test the Government set itself, is on the way up too."

"That is why I hope the Chancellor, in the interests of the nation, will change course today. He will say 'Actually, we haven't got it right, we took a gamble, it hasn't worked. Let's change course, let's find a different way forward'."

But Deputy Prime Minister Nick Clegg said the statement will "keep us safe from the debt storm of the market turmoil in Europe and elsewhere" and deliver a plan to get Britain building houses, roads and broadband infrastructure".