Philip Hammond is understood to be “flexible” about the year the target is achieved

Philip Hammond is preparing to use the autumn budget to acknowledge that the public finances may not be balanced before 2027.

At the election the Tories committed to ensuring that the balance sheet was in surplus by 2025. The date is set out in government documents, although in interviews Mr Hammond was more vague, preferring to call this the “middle of the next parliament”.

The chancellor may have to acknowledge in the budget that the landmark may not be reached before 2026 or 2027, the end of the next parliament under the current timetable.

This is a recognition of the unique spending pressures facing the Treasury, coupled with the lack of a majority in the Commons after the Tories’ disappointment at the general election.

Mr