Chancellor Philip Hammond has been urged to abandon his "disastrous austerity agenda" as he prepares to deliver his Spring Statement to MPs.
On Tuesday, parliament rejected Prime Minister Theresa May's proposed Brexit plan for a second time, little more than two weeks before the scheduled date of departure from the EU.
Philip Hammond vowed to free up more money to cut taxes and spend on public services in a "deal dividend".
The latest figures from the Office for Budget Responsibility (OBR) forecast that the United Kingdom economy will grow at the slowest pace since the financial crisis this year. The OBR has also revised up its wage growth forecasts, to at least 3% each year.
Mr Hammond is expected to set out plans for a £200 million investment in cutting-edge scientific research, as well as a series of new ways to protect the environment when he addresses the Commons on Wednesday afternoon.
That is a significant cut from the 1.6% expansion predicted by the government's economic watchdog last October.
Hammond said he now had 26.6 billion pounds of fiscal "headroom" that he has earmarked as a potential war chest for helping Britain's economy - for example, via extra spending or tax cuts - up from a previous estimate of 15.4 billion pounds.
The government is expected to borrow £22.8 billion this financial year to plug the gap between the money it spends on public services and the tax revenues it collects.
Lawmakers were expected to vote later on Wednesday against a leaving the European Union without a transition deal, then vote on Thursday on seeking a delay to Britain's departure, now scheduled for March 29.
There was a warning to the chancellor that a change to the way student loan debts are accounted for would knock £12bn from the government budget in 2020-21, effectively halving is spending power without increasing debt levels.