Britain’s economic recovery is “not yet secure”, George Osborne has warned ahead of next month’s Budget.

Despite rising growth and falling unemployment and inflation figures, the British economy remains vulnerable to economic turmoil around the world.

In a speech in Hong Kong ahead of this weekend’s G20 meeting in Australia, the chancellor told business leaders that it would be a “huge mistake” to declare “job done” in next month’s budget.

Mr Osborne has made it clear that he is not about to loosen the nation’s purse strings and that he would approach the coming year with caution, despite the more positive statistics in the first quarter of the year.

Mr Osborne said Britain has the fastest-growing major economy in Europe and the largest growth in employment levels in its history but added:

“Some in Britain might be tempted to say: ‘job done, let’s avoid more harsh decisions’. That would be a huge mistake. Abandon the plan and we abandon the progress we’ve made and go back to square one.”

The chancellor’s comments follow a sharp upgrade to UK economic growth forecasts from the Bank of England last week, which predicts growth of 3.4% this year, up from 2.8% previously.

However, the Bank of England and the Treasury have warned the economy remains neither balanced nor sustainable and it is now integral to continue with caution.