For a man confessing to what may well be the biggest, and the worst, set of forecasting errors yet made by a British Chancellor (some record), Alistair Darling put a remarkably brave face on the bad news that he was forced to acknowledge to an anxious country.

Perhaps the Chancellor’s eerie calm flowed from a secret acceptance that yesterday’s ragbag of low-cost, piecemeal Budget measures would, in reality, make little difference to the eventual fate of an economy laid low by a global slump and a national debt binge.

Perhaps Mr Darling actually believes his upbeat new prediction that Britain is poised for a strong and swift economic resurgence, starting next year.

Either way, the Chancellor sounded startlingly sanguine as he at last admitted to the voters what most of them had long since realised, and what he had long declined to accept: that Britain is mired in the deepest recession it has suffered since the end of the Second World War.

Mr Darling defied warnings from armies of forecasting experts last autumn, ignoring the rapidly darkening skies above his head and predicting in November that the economy would shrink this year by only about 1 per cent. Yesterday he was forced to confront the reality of just how wildly wrong this projection was.

The Chancellor’s overhauled Budget figures abandon the pretence that the UK might scrape through the present global downturn with a recession only on the scale of the Nineties downturn. Instead, the Budget concedes that GDP will plummet this year by 3.5 per cent, the sharpest decline since a 4.6 per cent fall in 1946.

Understandably, the Chancellor chose to gloss over the even bleaker truth that, combined with the 2.2 per cent drop in GDP already endured by the economy last year, his new forecast points to a total contraction over this recession of 5.4 per cent.

Instead, Mr Darling chose to try to focus national attention on his prediction for a rebound into strong growth by next year. Having bowed to the inevitable and removed the rose-tinted spectacles through which he had insisted on viewing this year’s grim prospects, the Chancellor immediately chose to gaze through them once more when contemplating the fuzzy outlook for 2010.

Defying widespread pessimism among a growing majority of forecasters, the Budget’s projections for next year now include a resumption of moderate growth, with GDP tipped to rise by 1.25 per cent. This compares with the average view among City economists that what growth may emerge will amount to no more than a meagre 0.3 per cent. Even more daringly, the Chancellor doubled up his optimistic bets and went on to predict that turbo-charged growth from 2011 onwards will accelerate to as much as 3.5 per cent.

Can these high-stakes bets by Mr Darling possibly be right? The Treasury will point out that more upbeat observers do detect tentative “green shoots” emerging in the economy. The Chancellor is assuming that these green shoots will thrive and bloom, having been fertilised and nurtured by the huge stimulus from a record-low interest rate at 0.5 per cent, the Bank of England’s quantitative easing strategy of pumping billions of newly created money through the economy, and his own modest tax and spending measures.

Yet it is very hard not to agree with City critics who accuse Mr Darling of producing wildly implausible predictions founded more on political expediency than economic reality, motivated by a desperate attempt to make the numbers add up on public finances that are now strained to breaking point.

It is far from impossible that the economy will return to growth next year, perhaps even growth of the relatively robust variety foreseen by the Chancellor. But this is improbable. The question is, where will this growth come from – which parts of the economy are primed for renewed expansion?

The Treasury’s forecasts show that Mr Darling is largely pinning his hopes on the British consumer. The Treasury has pencilled in a 2010 pickup in consumer spending by up to 0.5 per cent after a fall this year of about 3 per cent. Yet while this revival in consumption sounds very modest, and is by past standards, it still jars with a backdrop of soaring numbers of people out of work and huge pressure on household finances from the slump in house prices and share values. After a decade-long borrowing and spending binge, consumers are striving to save again and rebuild their financial security. It is far from clear that they will oblige Mr Darling with the renewed spending he expects.

As for the Chancellor’s projections that growth after next year will surge to levels above 3 per cent, this seems to elevate wishful thinking to an art form.

Forecast growth on that scale flatters Mr Darling’s dangerously stretched fiscal plans but it would require the economy to expand at a pace far above its long-term average and the rates achieved even in the boom years of the past decade. It also assumes that the damage caused by the recession to the industries that have been the key motors for growth over that boom period, such as the financial sector, will rapidly be repaired. These seem pretty heroic assumptions.

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