Gordon Brown finally owned up yesterday that the economy would undershoot his own growth targets by a wide margin this year.
He also had to come clean on public borrowing levels, which will run out higher than previously predicted.
But far from apologising, the Chancellor patted himself on the back for keeping growth going at all in what he called "the toughest and most challenging year for the economy".
In his annual Budget in March, he pencilled in GDP growth of 3-31/4 per for the current year.
In yesterday's pre-Budget statement to the House of Commons he downgraded that figure to 13/4 per cent, putting the blame squarely on soaring oil and commodity prices.
That was the cue for uproar from the Opposition benches generated by MPs desperate to show that Mr Brown's "Iron Chancellor" image is beginning to look rusty.
So loud was the jeering, Speaker Mick Martin had to intervene with an appeal for the Chancellor to be allowed to give his statement without interruption.
For his part, Mr Brown was unabashed. He went on to insist that growth would bounce back to between 2-21/2 per cent in 2006 and 2007 and to 23/4-31/4 in 2008.
Mr Brown said total net borrowing this year would be £37 billion, falling to £34 billion next year. Both of those figures are £5 billion up on his previous forecasts.
Public sector net borrowing would fall back to £31 billion, £26 billion, £23 billion and £22 billion in subsequent years.
Borrowing would equal 2.2 per cent of GDP this year, eventually dropping to 1.4 per cent.
Mr Brown opened his ninth annual Pre-Budget Report by outlining the impact that a "virtual doubling" of oil and commodity prices had had on Britain's main economic competitors.
US inflation has risen to 4.3 per cent, interest rates are rising in the euro area and nearly 11/4 million manufacturing and service jobs had been exported to Asia from the US and Europe.
While all countries faced global inflationary pressures, Britain had also needed to choke off rising house prices and soaring levels of consumer debt - a move predicted by some to herald a return "to the old familiar stop-go cycle of overheating, inflation and recession".
The Treasury was on course to meet its two per cent inflation target for the eighth year running and annual house price rises had moderated from a peak of 25 per cent to three per cent, Mr Brown said.
The economy had seen eight years of uninterrupted growth for the first time since 1805 and for the fifth year running growth had outstripped France, Germany, Italy and the European Union as a whole.
Employment, at 28.8 million, was the highest in the country's history and the economy was generating 6,000 new jobs a week and 3,500 new companies were being formed each week.
Mr Brown went on to insist that the Government was still meeting the "golden rule" of borrowing only for investment within sustainable levels of debt.
He broke into his sustained song of praise for his own economic achievements only to pour scorn on the economic proposals of David Cameron, who is expected to be named as the new Tory leader today.
"On closer examination, what has been called sharing the proceeds of growth would this year mean spending at least £12 billions lower, by next year £17 billions lower than plans," Mr Brown said.
"And I have concluded that this rule, however rebranded, is simply a new gloss on an old proposal advanced before previous budgets which would undermine our public services, undermine our infrastructure and undermine our economy."
City reaction to the speech was summed up early on by James Knightley at ING Financial Markets who said: "Gordon Brown's ninth pre-Budget Report has seen him finally admit that he got his numbers wrong."
The new projections were more in line with market thinking, but he still considered them to be too optimistic and growth may only be 1.8 per cent next year.
"In an environment of rising unemployment, very weak consumer spending and confidence, subdued industrial activity and growing worries about a US-led global slowdown next year, we struggle to find an optimistic spin on the economic outlook," Mr Knightley added.
CBI boss Sir Digby Jones said business was disappointed that the Chancellor was pushing borrowing to "worrying levels".
"Over the next five years he how expects to borrow some £17 billion more than he was predicting back in April.
"The Chancellor's predictions are totally dependent on strong growth in the economy generally, yet he has failed to provide any significant and immediate productivity incentives to to ensure this growth is delivered," Sir Digby said.
The response from Birmingham Chamber of Commerce and Industry was equally cool last night.
Growth forecasts were " overoptimistic once again" and the Chancellor had done nothing to address the "major problems" of small businesses in terms of soaring pension costs and red tape.
"This report was high on rhetoric and low on substance and we will have to wait and examine the detail when, and if, it becomes available," policy officer James Cooper said.
Black Country business leaders criticised the Chancellor for failing to defuse the "pensions timebomb" they claimed was threatening the country's future prosperity.
Keith Stanley, of the Black Country Chamber of Commerce, said: "The hard fact is that all the Chancellor's robust predictions will be knocked for six if he fails to act on pensions."
Ian Smith, who runs engineering pressure group EEF in the West Midlands, said the Chancellor had missed an opportunity to help manufacturing.