Philip Hammond is hemmed in by his manifesto, but must find the money somewhere. The defining domestic policy of British governments since has been cleaning up the public finances.
Mr Hammond hopes to keep it below that level. In his quest to reduce the debt pile, Mr Hammond has recently received some good news. Yet in other ways, his task has become trickier.
Tory MP s, meanwhile, are calling for universal credit, a big welfare reform, to be made more generous. There is little scope for trimming departmental budgets, most of which have already been cut to the bone.
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So the chancellor is considering tax rises. The manifesto also promised not to raise VAT. But applying the tax more broadly might not quite amount to breaking a promise.
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It would also be economically wise. That would hit the poor, but a more generous universal credit could offset the damage. Other options may be politically easier. Mr Hammond would be pleased just to get himself out of the latest fiscal hole. The first is Brexit.
Though the OBR has taken some account of the damage that leaving the European Union will cause, it seems to be banking on a soft exit.
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It assumes that trade will continue without much disruption and that immigration will remain fairly high. The second problem is demographic. Within a decade the ratio of pensioners to working-age folk will move rapidly in the wrong direction, as the baby-boomers retire. Not only is austerity not yet over; it has really only just begun.
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