PHILIP Hammond’s claim that “austerity is coming to an end” may not have been entirely accurate, analysis of the Budget has revealed.

While the Chancellor may have “eased” austerity, tax benefit changes announced since 2015 will leave the poorest fifth of people living in Britain an average of £400 a year worse off by 2023-24, the Resolution Foundation said.

The Institute for Fiscal Studies (IFS) warned that despite huge spending commitments, services would still feel “squeezed for some time to come” and that only by the narrowest of definitions could anyone believe austerity is close to ending.

It was a big money budget for the Tory Chancellor after better than expected tax receipts, and lower than expected spending handed him an unexpected improvement in the public finances.

The UK will now borrow about £25 billion in 2018-19, compared with a previous forecast of £37bn made by the Office of Budget Responsibility in March.

Most of the money freed up was splurged on the NHS – a decision that will generate an additional £550 million in Barnet consequentials for Scotland next year.

According to the IFS, had the Government not spent the money on the health service, they could have balanced the books, but Hammond’s decision will see the UK record a deficit of about £19.8bn.

Paul Johnson, the think tank’s director, warned that this could be a “gamble”, and if the public finances deteriorate next year, then Hammond could have “painted himself into a corner”.

“When push comes to shove, it’s not tax rises and it’s not the NHS that Mr Hammond is willing to gamble on, it’s the public finances,” he said.

“Because yesterday’s Budget was a bit of a gamble.

“Yes, the OBR reduced borrowing forecasts so he was able to find more money without committing to more borrowing.

“But what the OBR gives the OBR can take away. Suppose the public finance forecasts deteriorate significantly next year? They might. There’s perhaps a one in three chance of that. What will he do then?”

Johnson added: “He’s going to struggle to reimpose austerity having announced its end. Could he resort to sizeable tax rises? More likely he would just allow borrowing to persist at a higher level.”

The IFS also warned that tax rises are “all but inevitable” in the longer run to pay for the pressure on the NHS of Britain’s ageing population.

And although spending on the NHS in England and Wales will rise “substantially” as a result of the “big upward revision” to overall spending plans, the IFS said the rate of improvement will be “nothing particularly historic”, remaining lower than the average over the health service’s 70-year history.

They also warned that spending for most other government departments will be “essentially flat” over the coming five years.

Johnson said: “This is no bonanza. Many public services are going to feel squeezed for some time to come. Cuts are not about to be reversed.

“If I were a prison governor, a local authority chief executive or a headteacher I would struggle to find much to celebrate. I would be preparing for more difficult years ahead.”

The Chancellor also brought forward plans to increase the personal allowance to £12,500, which will impact Scottish taxpayers, and the higher-rate tax threshold to £50,000, which won’t.

In their analysis, the Resolution Foundation said that the plans will “overwhelmingly benefit richer households”, with almost half set to go to the top 10% of households.

Three-quarters of £12bn of cuts to welfare, announced in 2015, are still the policy of the Tory government.

The think tank said that while the poorest would gain from the increase to Universal Credit, it would be more than offset by the continued freeze on benefits.

Torsten Bell, the director of the foundation, said the budget was an “easing rather than an end to austerity”.

The SNP’s social justice spokesperson Neil Gray said the UK Government’s “latest austerity Budget” benefits “the rich at the expense of the poor”.