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He said the eurozone crisis, a hike in global commodity prices and a new assessment that the UK's economic boom was bigger and the bust deeper than previously believed was to blame.
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The chancellor said the OBR analysis had shown the debt challenge was "even greater than we thought because the boom was even bigger, the bust even deeper and the effects will last even longer".
"Our debt challenge is even greater than we thought because the boom was even bigger, the bust even deeper and the effects will last even longer," the chancellor said.
In 2006 he made an address to the IMF in which he predicted that, among other things, the US economy was at risk of a housing bust and deep recession that would have dire consequences for the rest of the world.
And the busts are often deeper, as has been the case this time.
The scars from the 2000 bust were too deep.
The troubled housing market -- a legacy of the deep bust that followed a historic boom in which reckless lending and borrowing led to the most punishing downturn since the Great Depression -- led to calls for the federal government to radically reform the way home mortgages are financed.
The Fed is not among those who believe that America's unexpectedly deep housing bust will drag the rest of the economy down.
One known as the clown prince of Surrealism, Salvador Dali (1905-1989) saw his muse as "Paranoia," and he painted her in 1935-36, a kitschy bust with a bosom deep in Hollywood decolletage.
As shares in homebuilders wilt following the failure of Taylor Wimpey, the country's largest, to raise urgently needed capital (see article), there are wider worries that Britain may revisit the trauma of the early 1990s, when a housing bust led to a deep recession.
You could also draw attention to the bust line with a deep v-neck, or opt for a dress that bells out at the bottom.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com