Chancellor Philip Hammond has rejected calls from Labour and some Conservatives, to announce the end of austerity in his spring statement on Tuesday.
It is expected to unveil the smallest budget deficit since 2002, thanks to a better-than-expected public finances.
But he told the BBC of the national debt was still too high, adding: “there is light at the end of the tunnel… but we are still in the tunnel for the moment.”
Labour has urged him to put an end to the “pain and misery” reduction of public expenditures.
Mr Hammond told the Andrew Marr Show, it would be wrong to pay “every penny” in additional public spending.
What not to expect from the declaration of spring
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United KINGDOM, economic growth exceeds the forecasts
He said it was a “very important moment” to see the debt starting to decrease after growing for 17 years.
But he said: “We must be very careful to look at series of numbers – a quarter or two quarters we need to look at what is happening in a sustainable way in the economy.”
The day-to-day deficit has been eliminated, it appeared earlier this month, two years later that the former chancellor George Osborne wanted when he set out in 2010.
The UK is now running a surplus of Â£3.8 bn in its last budget, the money borrowed to finance day-to-day spending rather than long-term investments – according to the National Bureau of Statistics.
“We have a debt of Â£1.8 billion to $ 86.5 percent of our GDP,” Mr Hammond said. “All international organizations recognize that is higher than the security level.”The debt ‘horror’
Mr Hammond told the BBC that “we must make the debt more low”.
“I think most people in this country would be horrified to remember that we have Â£65,000 of dollars of the public debt for all households in this country,” he said.
The chancellor is due to announce a half-yearly update of the Britain’s public finance figures on Tuesday, but confirmed that it would not be the delivery of any new tax or spending measures.
“If there is the flexibility and the space to do something, then we’ll decide in the fall how we are going to use it,” he said.
Economists expect the chancellor will announce the loan is fixed at approximately Â£7 lower in 2017-18 than had been predicted, when he unveils the latest forecasts from the Office of Budget Responsibility.
Also appearing on Andrew Marr, John McDonnell, the shadow chancellor, has called on the government to put an end to its austerity program.
He said that recent economic data have been “is not a question of celebration” – and said the chancellor “should be coming in the real world”.
He said that Mr Hammond had “changed the deficit on the shoulders of the NHS managers, institutional heads and on the shoulders of local government leaders.
“They are facing a financial crisis due to government restrictions,” he told Marr.
He called the government’s plans for an NHS pay deal “miserly and stingy”.
“Pay at the moment just about matching inflation, that’s all,” he added.
Mr. McDonnell has called on the government to use its spring, its declaration to the end of this Work, calls a “crisis” in public services.
But Mr Hammond promised to “look at the numbers” in the fall Budget.
He said: “the Local authorities have done an incredible job of ensuring the effectiveness,” adding: “of course, they are under some pressure.”