Hammond harnesses high tech, but room for manoeuvre is restricted

● Budget to focus on raising productivity through innovation ● But Chancellor facing long list of demands as Brexit bites

Philip Hammond has promised a budget that seizes the opportunities provided by cutting-edge technology to boost productivity, but expectations of major new investment are being downplayed amid growing concern about the impact of Brexit.

The Chancellor is set to deliver a “balanced” plan for the UK economy as new figures show the UK’S borrowing has risen.

Mr Hammond is under pressure from within his own party to pump money into house building and offer relief to ‘millennials’ struggling with the rising cost of housing.

Critics have warned the government not to backtrack on earlier suggestions that a seven-year squeeze on public sec- tor workers’ living standards will be eased.

“In this budget, we express our resolve to look forwards, to embrace change, to meet our challenges head on, and to seize the opportunities for Britain,” Mr Hammond will say in the first autumn Budget speech for 21 years.

“For the first time in decades, Britain is genuinely at the forefront of a technological revolution, not just in our universities and research institutes, but this time in the commercial development labs of our great companies and on the factory floors and business parks across the land.

“So we must invest to secure a bright future for Britain, and at this budget that is what we choose to do.”

The Chancellor will pledge that a post-brexit ‘Global Britain’ will be “a prosperous and inclusive economy where everybody has the opportunity to shine wherever in the UK they live, whatever their background… an outward looking, free-trading nation, a force for good in the world, a country fit for the future.”

However, his room for manoeuvre is limited with the cost of the UK’S Brexit settlement rising to almost £40 billion this week.

Howard Archer, the chief economic adviser at the EY Item Club, said: “Given the major uncertainties facing the economy centred on Brexit, Mr Hammond is reportedly concerned that investor confidence in the UK could be seriously damaged if he abandons the fiscal framework adopted only a year ago.”

The SNP’S Westminster leader Ian Blackford said: “Thanks to this Tory government, young people now face being the first generation in modern times to be worse off than their parents – with lower lifetime earnings, cuts to support, skyrocketing housing costs, and an extreme Tory Brexit that is squeezing living standards and robbing young people of opportunities.

“The Chancellor must take the long-overdue action needed with a Budget that addresses the specific problems millennials face – including giving young people a real living wage and making housing genuinely affordable.”

Scotland is set for a windfall running to hundreds of millions of pounds through the Barnett Formula. Announcements are also expected on city deals in Scotland and a VAT exemption for emergency services.the Chancellor is also facing pressure to address concerns over the roll out of Universal Credit.

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