The Organisation for Economic Co-operation and Development said the UK must do more to boost growth and tackle inequality, which it says are key to the economic recovery.
Speaking at a press conference with George Osborne, Angel Gurría, the OECD's secretary general again gave the Chancellor broad support:
Fiscal consolidation needs to be embedded in a comprehensive package that also promotes growth. Further structural reforms are key to a stronger, more inclusive and prosperous Britain.
In its annual report on the state of the economy the OECD said:
Fairness is important to ensure public support for the necessary fiscal consolidation effort, which will need to be sustained over a protracted period.
Restraint on spending on public services, imposed by the budget situation, will hit the poor hardest, as their consumption of public services is higher relative to their income than for the more affluent and they have less access to alternative services.
More top news
Hundreds of people in London and around the world have shared their memories to 'reclaim' Westminster bridge.
Ukip's only MP Douglas Carswell is quitting the party and will sit in the House of Commons as the independent MP for Clacton.
Leaders from across Europe gathered in Rome to mark the 60th anniversary of the signing of a treaty which led to the formation of the EU.