Hammond says his Brexit fiscal war chest has grown

Britain's Chancellor of the Exchequer Philip Hammond is seen outside Downing Street in London, Britain, March 12, 2019. REUTERS/Peter Nicholls

LONDON (Reuters) - British finance minister Philip Hammond said he now had 26.6 billion pounds of fiscal “headroom” -- which is earmarked for possible increased spending or tax cuts -- up from a previous estimate of 15.4 billion pounds.

Hammond, delivering updated budget forecasts on Wednesday, said the budget deficit forecast for the soon-to-close 2018/19 fiscal year was likely to be 3 billion pounds lower than expected in October, when he made his annual statement.

He said Britain’s public debt was set to fall sustainably “for the first time in a generation.”

The figures were prepared for Hammond by the Office for Budget Responsibility. They assume Britain will secure a Brexit deal, avoiding the shock of leaving the European Union with no transition.

Reporting by Andy Bruce and William Schomberg, editing by Larry King