The Chancellor delivered a somewhat racy Autumn Statement, belying his reputation as a fiscal hawk. Faced with a significant rise in projected borrowing due to a shortfall in tax receipts and lowered OBR growth forecasts, Mr Hammond nevertheless chose to announce “giveaways” amounting to 0.4% of GDP per annum by 2020-21. He also introduced surprisingly unambitious new fiscal rules that appear to give him scope to add up to a further 1.2% of GDP to the deficit in 2020-21, should he decide that the economy requires additional stimulus.

The centrepiece of the Statement, and the destination for most of the additional borrowing, is the new National Productivity Investment Fund, which will spend rising amounts on housing, transport, telecoms and R&D, reaching £7 billion by 2021-22, or 0.3% of GDP. Welfare measures absorb a further £2 billion in that year, reflecting the Government’s decision to backtrack on changes to personal independence payments and a small giveaway on universal credit. Tax changes were modest, with a rise in insurance premium tax and additional avoidance measures raising slightly more than the cost of freezing fuel duty for a sixth year.

The new fiscal mandate requires the government to reduce the structural or cyclically-adjusted deficit to below 2% of GDP by 2020-21 – significantly weaker than the previous requirement of an actual budget surplus in 2019-20 and beyond. The mandate is easily met on the OBR’s forecasts, showing a structural shortfall of 0.8% of GDP in 2020-21. The new supplementary target is for net debt to fall as a percentage of GDP in 2020-21 and is equally unlikely to constrain the Chancellor’s future room for manoeuvre, not least because an unwinding of the Bank of England’s term funding scheme is projected to cut the net debt ratio by 1.4 percentage points in that year.

The key judgement underlying today’s package was made by the OBR rather than the Chancellor – a forecast that the economy will grow by an average 1.9% per annum in the five years to 2020-21, only 0.2 percentage points below its Budget projection, despite Brexit. The OBR arguably gave Mr Hammond an easy ride on his first outing; it may well prove less accommodating in future assessments.