UK borrowing is forecast to be £45.2bn this year, £4.7bn lower than forecast last November and the country has experienced its first sustained fall in debt for 17 years, Chancellor Philip Hammond has said.

Delivering today’s Spring Statement, Hammond said the UK growth forecast has been revised up for 2018 from 1.4% to 1.5%.

Inflation is expected to return to its 2% target over the next 12 months.

Hammond said despite there being a 2018-19 surplus on the current account, he is not naive enough to think he has abolished the economic cycle and added that the Conservatives want to get rid of the deficit to give the next generation a chance.

Hammond said he does not think every available penny must be spent on debt reduction and does not agree with the “fantasists” from Labour who want to spend it all.

On the issue of housing, the Chancellor announced that an investment programme of £44bn to raise housing supply to 300,000 a year by the mid-2020s has been created, and an estimated 60,000 first-time buyers have already benefited from the stamp duty relief announced at the Autumn Budget.

The statement said the national living wage is also being raised to £7.83 per hour from next month – a pay rise of over £2,000 for a full-time worker since 2015.

Furthermore Hammond said: “We have cut taxes for 31 million working people by raising the personal allowance.

“Next year a typical taxpayer will pay £1,075 less income tax than in 2010-2011.”

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