The shortfall was also cut for the following years, although the government is still seen running a small deficit by 2022/23, the end of the OBR's forecast period.
Separately on Tuesday, the Organisation for Economic Cooperation and Development (OECD) forecast that Britain would miss out on buoyant global economic growth over the next two years.
"That said we don't expect Hammond to go on a spending splurge in the Autumn Budget".
"We've got used to growth of 2 to 2.5% a year since the last war really and if you actually look at what other economies around the world are doing, they're mostly doing quite a lot better than the United Kingdom economy".
On business rates, he said a revaluation has been brought forward to 2021, after which the government will move to revaluations every three years.
"However, much of this was anticipated and it is still fairly cautious with only a modest upward revision to growth of 0.1 per cent to 1.5 per cent this year. Light at the end of the tunnel".
Hammond said the OBR was predicting GDP to grow by just 1.5% this year, followed by just 1.3% in 2019.
Commenting on today's speech, Jeremy Leaf, an estate agent in North London and former RICs chairman says: 'We welcome the Chancellor's reiteration of the importance of the housing market and how tackling the housing crisis is key to all other economic policies, with particular reference to longer-term building projects and trying to address capacity issues by giving further assistance to apprenticeships.
"The Chancellor of the Exchequer has always been keen to have only one major fiscal event a year and today's Spring Statement was just that - a statement of the latest borrowing and growth projections without any fanfare, or new policy announcements".
DeVos Fires Back at '60 Minutes' After Interview Criticism
She also avoided answering a question whether disproportionate discipline for the same infraction was a form institutional racism. DEVOS: I have not - I have not - I have not intentionally visited schools that are underperforming .
The Chancellor's Spring Statement has been cautiously welcomed by Cumbria's financial experts.
But, Labour accused Mr Hammond of "complacency" and a "missed opportunity" to ease pressures on public services, while the Government's independent forecaster played down suggestions of a major improvement in the public finances.
London is to also receive an additional £1.7bn to deliver an extra 26,000 affordable homes, taking the total to 116,00 by the end of 2122.
On housing, the Chancellor said the Government was working with 44 authorities who have bid for a share of the £4.1 billion housing infrastructure fund.
Little was mentioned on Brexit, other than to say the previously announced preparation money was ready to be allocated.
"The growth predicted in the hard period up to Brexit was encouraging, as was the £80m for small businesses via the Apprenticeship Levy to help them overcome the complexity of the system".
The November budget also saw stamp duty scrapped for first-time buyers purchasing properties under £300,000.
The markets, though, warmed to Hammond's speech and sterling rose slightly against the dollar, no doubt fuelled by comments hailing the United Kingdom as an "outward looking free trading nation" whose "best days are ahead of us".
NAHT general secretary Paul Whiteman, said that the "amazing results" of special schools and alternative provision settings were "at risk if we don't secure more high-needs funding for schools".