While Chancellor Philip Hammond was widely expected to concentrate on the just-about-managing in his Autumn statement, he has now cautioned people not to expect generous windfalls.
Mr Hammond says prudence is necessary as the Government gears up to leave Europe.
In a round of interviews conducted as he prepares to announce his Autumn statement, he said he needed to make sure he had “headroom” within the public purse in order to ensure he can deal with the economic fall out of Brexit.
Campaigners have urged Mr Hammond to reverse cuts to universal credit made by his predecessor George Osborne. Critics of the policy say working families will lose £1,300 a year within four years.
Asked directly if he would reverse universal credit cuts, Mr Hammond refused to go into details set to be made public during Wednesday’s Autumn statement.
However, he cautioned against high expectations, saying: “You’ve seen the forecasts, the range of independent forecasts, we’ll get the Office for Budget Responsibility’s forecast on Wednesday.”
He added: “Many of those forecasts are pointing to a slowing of economic growth next year and a sharp challenge for public finances.”
The Chancellor said that as a result of challenging economic forecasts, it was necessary to adopt a responsible approach to make sure that resilience was built into the British economy as it enters the uncertain period caused by Brexit negotiations.
He said Britain would need to be “match-fit” to meet the challenges posed by expected rising inflation and fluctuating markets.
Mr Hammond added: “We have to maintain our credibility – we have eye-wateringly large debt, we still have a significant deficit in this country and we have to prepare the economy for the period that lies ahead.”
He said he was concentrating on ensuring that the British economy was “watertight” and that he had enough “headroom” so he could deal with challenges thrown at him as a result of Brexit.
However, while cautioning against expecting any big policy announcements, there was a hint that the so-called Jams of the country, the just-about-managing, could receive some support.
Without giving away what form that support would take, he added that he would help people “who work hard and by and large do not feel that they are sharing in the prosperity that economic growth is bringing to the country.”
The Shadow Chancellor John McDonnell told Mr Hammond that he needed to reserve universal credit cuts as well as reductions which have been made in disability benefits.