Theresa May has insisted that Chancellor Philip Hammond’s job is safe after a “very good” Budget.

The Prime Minister praised Mr Hammond during a visit to Leeds following reports in recent weeks that she might try and move the Chancellor in a Cabinet reshuffle.

Asked if Mr Hammond’s job was safe, Mrs May laughed and said: “Yes. The Chancellor did a very good job yesterday.”

Mrs May said the Budget had been about investing in the future.

“What the Chancellor was doing was setting out how we will ensure we have an economy fit for the future.

“Both the Chancellor and I agree that what the Budget was about was about jobs for people up and down the country. It’s about ensuring that people are in work.

“This was a budget that was, yes, about investing for the future, investing in infrastructure, making sure we’re building enough homes that the country needs, giving people who are trying to get their foot on the housing ladder that boost by abolishing stamp duty for first time buyers on properties up to £300,000.

“But, also, recognising that, yes, people are feeling pressure today and that’s why we continue freeze fuel duty – that’s a real help to people – who we’re increasing personal allowance – that’s a tax cut for people.”

Mrs May said she wanted to “reignite the dream of home ownership for people.”

And Mr Hammond said the flagship Budget tax cut to assist first-time buyers would help a million people get on the housing ladder.

The Chancellor dismissed criticism of the policy from the Office for Budget Responsibility, saying the Budget watchdog had not taken into account measures to increase the number of new homes being built when it said the stamp duty move would simply push up prices.

The Chancellor’s home-buying incentive was part of a giveaway package which pumped an additional £25 billion into priorities such as housing, infrastructure and the NHS.

But the OBR took the shine off the stamp duty move by predicting it would push up prices by around 0.3% – meaning many first-time buyers would have to pay more than they otherwise would while the main gainers would be people who already owned a property.

It also suggested that only around 3,500 additional homes would be sold as a result of the incentive.

But Mr Hammond told the BBC: “The OBR looked at a particular narrow question – if you reduce stamp duty and don’t do anything else, what would happen?

“But we have not done ‘nothing else’. We have introduced a very big package, £15 billion of extra money going in on top of the billions we are already spending on housing to increase the number of houses that we build in this country.

“The important thing is that over the next five years, over the life of this parliament, a million first-time buyers will make an average saving of just under £1,700 when they buy their first home.”

(PA Graphics)(PA Graphics)

After the OBR downgraded growth forecasts due to poor productivity performance, Mr Hammond said the challenge for the nation was to “prove them wrong”.

Pressed on whether he had become a “Brexit convert”, Mr Hammond, who backed Remain in the referendum, told BBC Radio Four’s Today programme: “I’m focused on getting this done. I have never been gloomy, I’m a pragmatist. I take the world as it is.”

Shadow chancellor John McDonnell said the UK’s productivity crisis could have been avoided if governments had been prepared to borrow more to invest in boosting the economy.

“I would have stopped the tax cuts to the corporations and the rich. That would have paid for our public services.

“I would have borrowed more to invest in our economy,” he told ITV’s Good Morning Britain.