Osborne is in the process of rolling out the UK’s most stringent cutbacks in state budgets in nearly 70 years and on Friday received the Swedish finance minister Anders Borg in his official residence at 11 Downing Street.

Labelling Sweden as Europe’s “tiger economy”, Osborne said that is studying how Sweden revamped its tax and welfare systems in the 1990s and dealt with the banking crisis and deep recession that plagued the country.

“Two generations, Anders’ generation and the 1990s, have undertaken difficult decisions that have resulted in a fantastic Swedish economy…The country is a model for the rest of us,” Osborne told the Swedish Dagens Nyheter’s (DN) daily on Friday.

“We definitely look at Sweden and think that it is an impressive example of what one can do with its economic policies,” he added.

Hundreds of thousands of public sector workers currently face the axe in the UK as the government aims to wipe out the second-largest deficit in the EU.

Despite the stiff opposition he faces from both the opposition and the unions, who accuse the government’s measures as too rapid and harsh, Osborne remains resolute in carrying them out.

“If we did not make these decisions, the situation would become catastrophic for the country. We would risk our credit rating, resulting in higher interest rates, and it would lead to worse consequences for the public sector,” he said.