The chancellor said clarity around Brexit would increase consumer confidence and lead to higher growth in the economy.
But a new report has warned of the longest fall in people’s living standards since records began over 60 years ago.
Labour said Mr Hammond was “cut-off from the real lives of people”.
The reduced growth forecasts, blamed on the economy’s flat productivity, threatened to overshadow a series of announcements in the Budget.
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These included a cut in stamp duty for most first-time buyers, and setting aside £3bn for preparations for the UK to leave the EU.
BBC political editor Laura Kuenssberg said Mr Hammond, who has been under pressure from Eurosceptic Tory MPs, would be “broadly content” with how his big day had played out, but that “very difficult questions” about the state of the economy remained.
There is a warning by the Resolution Foundation think tank that the squeeze on people’s incomes is set to last longer than that which followed the post-2008 crash.
Too gloomy about Brexit?
The chancellor told BBC Breakfast there was always going to be uncertainty about the outcome of Brexit negotiations.
But he said moving into 2018 there would be a “sense of movement”, and that “confidence will return, certainty about the future will return, businesses will start investing, consumers will start buying big ticket consumer items again and that will help to get our economy growing again faster”.
He also denied being “gloomy” about the UK’s prospects outside the EU, a criticism he has faced from some within his party.
The £3bn cash would help prepare for a “range of outcomes” he said.
“As we move forward we will hopefully be able to gradually narrow down that range of outcomes.”
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On the predictions by the Office for Budget Responsibility, he said: “The challenge for us as a nation is to prove them wrong.”
Shadow chancellor John McDonnell said the hit to the economy would “hit all of society”.
He said more government intervention and extra spending would “pay for itself” and alleviate the UK’s productivity problem.
How bad is the economic picture?
The chancellor said the economy continued to “confound those who seek to talk it down” by creating jobs and continuing to grow.
But the independent Office for Budget Responsibility soon signalled that it was less optimistic about the future, slashing its 2017 growth forecast from 2% to 1.5%.
Output, it added, would be weaker than previously thought in each of the subsequent four years.