Poor George Osborne. Just over two years ago it was all going so well when, as shadow chancellor, 20 prominent economists wrote to the Sunday Times to back his deficit reduction programme.
Osborne described it as a “significant moment in the economic debate” and soon enough the Liberal Democrats jumped aboard the Osborne economic steam train.
Their support allowed him to unveil an ambitious Comprehensive Spending Review aiming to eliminate the structural deficit within the parliament.
Back in 2010 as the eurozone debt crisis began to rage Britain appeared ahead of the game in cutting spending.
Now though, the train has ground to a halt and with Osborne at the economic helm Britain is mired in a double-dip recession.
Output is lower than when he took office and the country has just seen three consecutive quarters of decline, including a fall of 0.7 per cent in Q2.
Osborne’s woes have been compounded by the March Budget being comprehensively dismantled after facing public pressure and intensive lobbying campaigns.
Government schemes such as the National Loan Guarantee scheme have been launched to much fanfare only to be abandoned months later.
Another housing strategy is rumoured to be on the way despite the previous one being launched just before Christmas. There is a distinct whiff of panic from the Government.
It is in the last week though when the negatives have really stepped up a gear. Firstly, nine out of the 20 economist who backed Osborne in March 2010 have now reversed their positions and are calling for more spending to stimulate growth.
Liberal Democrat MPs are also calling for spending to boost growth as Conservative MPs call for more cuts to meet the deficit targets.
The economic unity that forged the coalition is now creaking at the seams and with party conference season starting next month grievances could get an airing.
While Labour has been relentlessly critical even measured old hands such as former chancellor Alistair Darling are now going for the jugular after he accused Osborne of “giving up on growth.”
But the worst news of the week was that the deficit has begun to grow again because of falling tax receipts with £600m of public borrowing in July compared to a £2.8bn surplus last year.
The Office for Budget Responsibility is already forecasting £150bn more borrowing than in 2010 and tax receipts have fallen 10 per cent year on year between April and June and a massive 20 per cent in July.
Both the Conservatives and Liberal Democrats have already committed to spending cuts until at least 2017.
The Treasury says it is still too early to draw firm conclusions about the financial year as a whole.
A spokesman says: “The Government remains committed to the credible plan we have set out to deal with Britain’s debts, and today’s numbers emphasise how risky it would be to deliberately increase borrowing.”
Labour’s shadow chief secretary to the Treasury Rachel Reeves brands the figures a “damning indictment” of the chancellor.
She says: “His failed plan has delivered the exact opposite – a double dip recession which is leading to soaring borrowing. What more evidence does the Government need that their plan has failed and they need to change course?”
The worsening public finances and negative growth create a toxic cocktail for Osborne that could lead to Britain being downgraded from its treasured AAA credit rating.
In February, Moody’s put the nation on negative watch and Osborne described it as a “reality check”.
Osborne has placed protecting Britain’s rating on such a pedestal that losing the treasured status could prove a killer blow to his reputation.
Politically he is in a bind as the dynamics of the coalition leave little room for bold policy manoeuvres.
He is destined to effectively keep his fingers crossed that the eurozone does not explode and hope the situation improves.
It has been a bad week but it could get a lot worse and Osborne may not be too grateful that Prime Minister David Cameron has guaranteed his position as chancellor after all.