Perhaps to curb the air of optimism, there was also a further £500m set aside in case of a no deal Brexit.
The agency said that it expected a deal to be reached but "the risk of a no-deal Brexit on March 30 2019, while still not our base case, has increased sufficiently to become a relevant rating consideration". "The scale would be very hard to predict, given the lack of precedent".
But Theresa May's official spokesman said that the Chancellor was indicating that he was ready to use his "fiscal firepower" to shore up the economy if the United Kingdom withdraws without a deal.
She said Hammond's decision to cut taxes for those on 100,000 pounds a year helps more men, when he could have done more to sort out problems for families in poverty instead.
Philip Hammond used this week's Budget to announce spending spree in what he called "a budget for Britain's future" - and one which heralds the end of austerity.
He told Today: "We retain an ambition to balance the budget".
But expert analysts said that the bulk of the Chancellor's tax cuts would go to the wealthy, while his spending plans meant "no bonanza" for public services outside the NHS.
They will meet executives to discuss Brexit and this week's annual Budget, which included spending pledges and higher taxes on technology firms.
In response to Mr Raab's letter, Downing Street said "we are working to achieve a deal as soon as possible".
And the IFS said the change would put £24 a year more into the average basic-rate taxpayer's pocket - £176 for higher-rate payers - compared to what would have been expected if thresholds had simply risen in line with inflation.
Pregnant Meghan Markle breaks Royal protocol yet again
The kiwi is New Zealand's native bird, but the fact it can not fly means its young have been affected by predators in the wild. The picture shows a visibly shocked Meghan standing with her mouth wide open, with Prince Harry looking very confused.
Mr Hammond promised an extra £1.7 billion for the implementation of Universal Credit.
The UK is due to leave the European Union on 29 March 2019.
This year the timing of the Budget is slightly different.
We are confident that we will secure a deal which delivers that dividend.
While the improvement in the public finances has eased some of the pressure for tax increases, it is likely that the Chancellor may still have to find additional revenue from somewhere. However, the OBR still projects a slowdown after 2019, with GDP growth forecast to come in at just 1.4% in both 2020 and 2021 before rising back to 1.6% in 2023.
"Small businesses on our high streets that can not get Small Business Rate Relief will be delighted with the significant discount for the next 2 years, which on average will help these businesses to the tune of nearly £2,000 each, but potentially up to around £16,000 off small businesses facing the biggest bills".
A total of £160 million has been announced for counter-terrorism police funding for 2019/10. This means that the NHS will have an extra £2 billion a year to spend on mental health services.
In addition, £420 million will help local authorities to fix potholes on roads, bridges and tunnels.
It comes after the use of PFI and PF2 contracts to fund construction of hospitals and schools, for example, has declined significantly and come under criticism.
Chancellor says the era of austerity is coming to an end. A standstill non-event.