A top economic expert slammed the coalition government yesterday for leaving Britain awash in a sea of debt.

Institute for Public Policy Research chief economist Tony Dolphin warned that rising numbers of households in the red will endanger any economic recovery.

He said Britain's economic model is "flawed" - with short-term profits prioritised over investment - and condemned the government for failing to invest in industry while encouraging even greater debt with its Help to Buy scheme for first-time homebuyers.

Mr Dolphin said recovery could prove "unsustainable and bittersweet" for millions of people, warning that the country was still living beyond its means following the "Great Recession" which started in the wake of the financial crisis in 2008.

"There is a danger that a stronger economic recovery and good news on the jobs front will lead to complacency," he said.

"Instead, we should be alarmed that growth is being driven by exactly the same mix of factors that contributed to the depth of the last recession."

He accused the government of "running out of ideas" on the economy.

"In the global economy we are truly living beyond our means, and have been doing so for three decades," Mr Dolphin said. "The UK's trade performance has been hindered in recent years by developments in the eurozone. But poor numbers are nothing new.

"This year will be the 30th straight year in which the UK has recorded a deficit on its current account balance.

"This is a sign that there is a fundamental flaw in the UK's economic model."

His stark warnings come as a separate study by consultancy firm Jobs Economist forecast that a predicted rise in real pay will be too small to have a noticeable impact on the financial well-being of most workers.

Director Dr John Philpott said: "This time last year we correctly forecast that 2013 would be a year of 'hard slog' for UK workers, with longer hours for no extra real reward.

"For the majority of workers 2014 is unlikely to feel much better, the pickings improved but still very slim.

"The economy won't experience any serious wage inflation in 2014 but workplaces will see the emergence of even greater wage inequality."