Britain’s economy is “not yet secure” despite a sharp upgrade to growth forecasts, the Chancellor has warned.

In a speech to business leaders in Hong Kong, George Osborne insisted he would continue to make tough economic decisions in next month’s budget.

This comes despite the Bank of England raising its growth forecasts from 2.8% this year to 3.4%.

“Some in Britain might be tempted to say: job done, let’s avoid more hard decisions,” he said.

“That would be a huge mistake. Abandon the plan and we abandon the progress we’ve made and go back to square one.

“I said that we have to go on dealing with our debt and our deficit – and we have no choice but to do so.”

Much of Britain’s recovery has been led by consumer spending – with exports still lagging behind imports.

“We cannot rely on consumers alone for our economic growth, as we did in previous decades,” he added.

“And we cannot put all our chips on the success of the City of London, as my predecessors did. Britain is not investing enough. Britain is not exporting enough.”

He said the Budget on March 19 will lay foundations for “long-term economic security” by supporting business investment and exports.

Responding to extracts from Mr Osborne’s speech, Labour’s shadow chief secretary to the Treasury, said: “George Osborne is finally recognising that the recovery, which he choked off in 2010, is still not secure or balanced.

“But he has not yet admitted that working people are facing a cost-of-living crisis and are £1,600 a year worse off since he became Chancellor.”