Alistair Darling, the chancellor, faces criticism from Brussels after the European Commission forecast the UK would breach European Union rules on budget discipline this year and next, and threatened formal censure.

In its latest six-monthly economic forecasts, Brussels said the UK’s budget deficit would rise to 3.3 per cent of gross domestic product in 2008 and 2009, breaching the 3 per cent limit set under the EU’s stability and growth pact.