To rousing cheers from his Conservative colleagues, the Chancellor said: "Britain's economic plan is working," pointing out that the UK's economy was rising faster than any other G7 country and stressing how critics of his strategy had been "proved comprehensively wrong".
Politically, he sought to out-manoeuvre Labour by announcing plans for an updated Charter of Budget Responsibility to be approved by a Commons vote in a year's time. This would commit the Government to a spending restraint stretching long after the 2015 General Election. "Let's see how Labour vote on that one," quipped one of his aides.
In a packed Commons chamber, Mr Osborne hailed Office for Budget Responsibility (OBR) forecasts upgrading growth from 0.6% to 1.4% this year and from 1.8% to 2.4% next year, and revising down expectations for state borrowing by a total of £73 billion over the next five years.
Reminding MPs the Government had "held our nerve" amid calls for an economic Plan B from Labour and the SNP, the Chancellor said: "Thanks to the sacrifice and endeavour of the British people, I can today report the hard evidence that shows our economic plan is working."
But he warned "the job is not yet done" as he laid out further saving measures, including £3bn cuts in public sector spending, a new cap on the overall welfare bill and an increase in the state pension age to 68 in the mid-2030s and 69 in the late-2040s - sparking union protests that ministers expected young people to work until they drop. Those in their 20s now face the prospect of not receiving their state pension until they are aged 70.
When shadow Chancellor Ed Balls rose to respond for Labour he faced a wall of Conservative sound as Tory backbenchers sought to drown him out.
At times looking red-faced, Mr Balls rejected the Chancellor's claims of success, pointing to figures suggesting that working people were an average of £1700 a year worse off since the 2010 election because of prices rising faster than wages.
Labour claimed the OBR's report showed real wages were due to fall by 5.8% by 2015.
"There has not been a parliament in living memory where we have had a fall in living standards like this," said Mr Balls, who branded Mr Osborne an out-of-touch chancellor.
His colleague, Margaret Curran, the shadow Scottish Secretary, accused Mr Osborne of being in complete denial about the cost of living crisis.
Stewart Hosie for the SNP said the Chancellor had a miserable record on economic growth and borrowing, and was simply promising an austerity agenda of cuts and more cuts.
He said the proposed rise in the state pension age was "a new hammerblow to Scotland", noting: "This means that Scottish youngsters leaving school this year will have to work for more than 50 years to get the state pension they will pay for and it takes no account of Scotland's lower life expectancy. The Tory Chancellor is adding unfairness on top of austerity."
In its report, the OBR warned improvements to the fiscal outlook were cyclical rather than structural and noted that higher-than-expected growth this year had been fuelled by consumer spending and rising house prices rather than business investment and trade.
There were also words of caution from the respected economic think tank, the Institute for Fiscal Studies. Its director Paul Johnson said: "We are still in a big hole. We are still borrowing a lot more than £100bn this year which is a lot more than the Chancellor hoped back in 2010. There is an awful lot of austerity still to come."
Mr Osborne unveiled measures to help young people into work, scrapping employers' National Insurance contributions for under-21s, in a move the Treasury said would affect 1.5 million jobs.
"We're not going to leave young people behind as the economy grows. We are going to have a responsible recovery for all," said the Chancellor.
But he warned jobless 18 to 21- year-olds without basic English and maths skills that they would be required to undertake training or lose benefits, and to start a traineeship, work experience or community work after six months or face the same sanction.
Mr Osborne received a cheer from the Tory benches when he confirmed fuel duty would be frozen again next year as he cancelled the final 2p-a-litre rise pencilled in by Labour. He also sought to cheer commuters by saying rail fares would rise in line with inflation in January rather than the planned rise of inflation plus 1%.
He confirmed the two policies announced during the party conference: free school meals for primary schoolchildren in England with additional funds to upgrade kitchens and the £1000 tax allowance for married couples.
TUC general secretary Frances O'Grady said: "Growth may be returning but families are getting poorer. The official forecasts show Britain's living standards squeeze is to get even tighter - a point curiously absent from the Chancellor's address - and is a major blow to hard-working people."
Mark Serwotka, leader of the Public and Commercial Services union, added: "This is not an economic plan, it's austerity for austerity's sake, as the Tories - propped up by the LibDems - look to reshape our society for years to come and make the poor, sick and unemployed pay for the greed and recklessness of wealthy elites."