The Telegraph reports Osborne said the world economy remains volatile and the UK recovery could be shattered by a further crisis.

The report said a senior government source had earlier said the UK was increasingly distancing itself from “bucket economies” in the eurozone and was joining the US in terms of growth.

Speaking as he arrived at the G20, Osborne said: “This is first time the G20 has met in recent years where there is not a sense of crisis about the global economy, and indeed the performance of some advanced economies has been better than when leaders met last year and even when finance ministers last met in July.

“We are still in the early stages of recovery. We still have great economic challenges. I arrive at this summit as the finance minister with pretty much the highest budget deficit around the table, even though it has come down by a third.

“So we have a long way to make up for what happened. We are still in the early stages of that journey.”

He then cautioned on being too optimistic on the recovery.

“I don’t think anyone should get ahead of themselves: unemployment is too high, the deficit is still too high. Yes we have had better economic news and yes confidence is improving, but as we have seen many times events can overwhelm and shake that confidence.”