We should be relieved that the Government has got our national finances under control

The UK’s capacity to grow may have been undermined by the uncertainty over the outcome of the Brexit negotiations, but having a bit of fiscal leeway is very helpful

Let’s step back. What does the world think of Phillip Hammond’s not-quite-a-budget? What does this to the UK’s standing globally? Are there wider implications?

I was pondering all this as I was listening to the Chancellor’s speech, and I noticed as he was speaking that the FTSE 100 index had suddenly dropped 15 points. Was this a market reaction to the not very upbeat outlook from the Office for Budget Responsibility? Or the decision not to take advantage of slightly stronger tax receipts to loosen the fiscal squeeze?

Er, no. It was President Trump’s decision to sack Rex Tillerson. In the wider scheme of things, when a UK Chancellor does something it barely registers. And when he does nothing it registers not at all.

Yet there is a wider significance in both the Spring Statement and the OBR forecasts that I think will become clearer in the coming weeks. The overriding point is that the Government is starting to have financial options. If it needs to spend money it will be able to do so, which is a good thing because it almost certainly will.

Take relations with Russia. The UK economy is roughly double the size of Russia’s. In 1990, just before the Soviet Union imploded, it was less than half the size of the USSR and smaller than the current Russian Federation. Having the UK’s finances in order means if it has to spend more money on defence and internal security, it can choose to do so.

Take relations with Europe. There are costs associated with Brexit. Two years ago, the UK was growing faster than the rest of the EU; now it is growing slower than most of it. That discrepancy is partly cyclical, because the eurozone was performing well below its capacity and the UK was growing at or above it.

But part of the shift may be structural in that the UK’s capacity to grow may have been undermined by the uncertainty over the outcome of the negotiations. Either way, having a bit of fiscal leeway is very helpful.

Take relations with the US. American economic policy is quite unpredictable and will remain so. Unlike the eurozone, and particularly Germany, the UK’s trade with the US is in rough balance, so it is unlikely to be targeted by the US – whereas Germany seems to be very much in the line of fire. But while the UK remains in the EU, it may get caught in the crossfire.

Or take the global economic cycle. One of the most interesting passages in the OBR report looks at the possibility of a recession in the near future. It notes that the present expansion is unusually long, and that while none of the 40 forecasters responding to the Treasury is forecasting recession this year or next, go back 10 years and only one out of 34 outside forecasters predicted recession then.

So there are lots of reasons why it is a relief that the Government has got our national finances under some sort of control. That buys it a modicum of credibility in the world of financial markets.

But it tells us nothing about the Brexit negotiations – though the likely outline of the exit payments to the EU is sketched by the OBR. And it tells us very little about the wider concerns of the British economy, such as the disappointing record on productivity.

However, the fact that there is no longer a current deficit – the Government is borrowing only to invest – is an achievement.