George Osborne faces a black hole of more than £20 billion in the public finances, according to official government economic models, the Financial Times reports.
Italy has come under renewed pressure from the European Commission to take "decisive action" on economic reform or face fines.
The era of record low interest rates in the U.K. has helped salvage the country's economy - but also created further problems.
China has set its gross domestic product (GDP) growth target for 2014 at 7.5 percent, the same as for 2013, Chinese Premier Li Keqiang said.
With wage rises failing to match the flickering signs of an upturn in the global economy, chief financial officers have told CNBC that a lack of consumer spending is a major fear for their companies.
Europe's recovery this year will not be straightforward, according to Axel Weber, the chairman of UBS, who warned against complacency in the euro zone with banking stress tests and anti-EU sentiment waiting to derail modest growth.
Western Europe and Japan are the most sought-after regions for hedge fund investors in 2014 as economic conditions show signs of improvement for the two regions, according to Deutsche Bank's annual Alternative Investment Survey (AIS).
Heavy storms that have flooded around 6,000 U.K. homes could knock more than 1 percent off economic growth, a U.K. economist told CNBC on Monday.
The U.S. is at risk of becoming a "Downton Abbey" economy, as the gap between the top 1 percent and the poor widens, former US treasury secretary Larry Summers has warned.
While operating more than an entire percentage point below its potential growth rate, the U.S. economy still raised its business sector employment by nearly 2 million people over the last twelve months.