And it has concluded that his decision to use all of the extra money that came from revised borrowing forecasts to invest in the NHS could leave him "in a corner".
"The era of austerity is coming to an end, but discipline will be maintained", Hammond said.
Speculation was rife that the Budget had the feel of paving the way for an election manifesto, but Mrs May, speaking today in Norway, said that was not the government's intention.
"This is no bonanza", he said.
"We recommend that the government undertakes a comprehensive review of taxation and how it charges for public services, such as adult social care, with the aim of raising revenue more efficiently and equitably than it does at present", it said. Cuts are not about to be reversed.
'If I were a prison governor, a local authority chief executive or a headteacher I would struggle to find much to celebrate. She said: "When we go for Sunday lunch, Lee likes a beer and I like a wine".
The personal allowance, which represents the amount that people can earn before income tax kicks in, has risen sharply over the past decade.
The IFS said Hammond had chosen to spend his fiscal windfall rather than save it, increasing NHS spending by around £20bn until 2023-24.
The Institute for Fiscal Studies, the UK's leading tax and spending thinktank, said on Tuesday that the chancellor's approach constituted a "bit of a gamble" with the public finances because the short-term boost for the government's coffers could quickly evaporate.
Sports Direct buys Evans Cycles, hopes to keep 50% of stores open
Evans Cycles is the latest purchase for Ashley who also bought House of Fraser out of administration in August for £90m. We will make contact with landlords over the next few days and discuss the future of individual stores, ' Ashley added.
Green MSP Patrick Harvie said: "Instead of a budget to fix the harm done by austerity or respond to the climate emergency, we saw a budget which once again gives the biggest tax cuts to the richest 10% and continues the reckless pursuit of an unsustainable economy".
"What the OBR gives the OBR can take away", he warned.
"Suppose the public finance forecasts deteriorate significantly next year". 'There is one stand-out example of where the rules of the game must evolve now if they are to keep up with the emerging Digital Economy, ' Hammond told Parliament. "What will he do then?" The move - which had not been slated to happen until 2020 - means basic rate taxpayers will be £130 a year better off.
"He's going to struggle to reimpose austerity having announced its end".
In such circumstances, the Chancellor was "likely" to allow borrowing - and the national debt - to rise, meaning that his target to eliminate the deficit by the mid-2020s was now "for the birds".
But spending for departments outside of health and defence will remain largely flat, the IFS said.
The Chancellor suggested that a Brexit deal could trigger more tax cuts and increased public service spending.
Since then, it has helped 121,500 people, the Chancellor announced in this year's speech, with the number of people buying their first homes at its highest level for over 11 years.