The Resolution Foundation said the outlook for households was “bleak”, with food inflation building and energy prices likely to increase substantially in October.

The living standards think tank called for the Chancellor to revisit planned benefit payment adjustments, which are likely to mean a 5pc real-terms cut to Universal Credit and the State Pension because of soaring inflation.

It said benefits should be increased by 8pc, rather than the 3.1pc being planned.

James Smith, Resolution’s research director, said: “The chances of a living standards recovery this year are receding as rapidly as inflation is rising, and the risk of another recession is looming into view.”

Manufacturers are already increasing prices at a record rate in the face of soaring inflation pressures.

The latest manufacturing outlook by business group MakeUK and BDO found the highest price balance in the survey’s history, while more than 54pc of companies reported a “major increase” in costs.

Make UK called for the reintroduction of business rates relief, and for Mr Sunak to postpone a planned National Insurance increase. It favoured a super deduction extension, “with a view to making it permanent at the Autumn Budget”.

Stephen Phipson, its chief executive, said many businesses would “simply not recover” without extra support.

A Treasury spokesperson said: “We have backed businesses throughout the pandemic with an unprecedented package of support including VAT cuts, business rates holidays and government backed loans worth around £400bn, and we will continue to stand firmly behind them in the months ahead.”