Analysis By Hugh Pym Business correspondent, BBC News

The chancellor continues to oversee a growing economy

What a difference a year makes.

Twelve months ago the chancellor went into the pre-Budget report (PBR) braced for an embarrassing climbdown on his view of the economic outlook.

In the Budget of 2005 he had forecast growth of 3% to 3.5% for that year.

That proved to be way too optimistic. The figure conceded in the PBR was just 1.75%. There was much chortling on the Opposition benches.

This time around, Gordon Brown's fortunes have reversed. Manufacturing and exports have picked up.

Consumers have held their nerve so far in the face of rising interest rates.

Upbeat assessment

The chancellor will delight in telling the Commons that his forecasts for 2006 have been too cautious. At Budget time he predicted that the economy would expand by 2% to 2.5%. The likely figure will exceed that, perhaps coming in at 2.8%.

The British economy is set fair. The Bank of England has predicted that inflation will fall gradually towards its target of 2%.

Under-estimates of the amount he needs to borrow have become all too familiar in the chancellor's statements in recent years

As for growth, it concurs with the chancellor's opinion that next year's prospects are yet more favourable, with a performance above its long-term trend.

Add in a record number of people in work, and Mr Brown will have the ingredients he needs to dish up an upbeat assessment of the British economy under his stewardship.

It will serve him well in what will be one of his final Commons set-piece appearances.

Rising unemployment

There will not be much said about rising unemployment. The jobless total is at a seven-year-high (at the same time as higher employment levels brought about by immigration and people working till they are older).

The possibility of a worldwide slowdown precipitated by the US economy hitting the buffers will not be a central assumption of the speech.

But Mr Brown will feel entitled to portray the economic glass as half full rather than half empty.

Even borrowing is more or less on track. Tax revenues have held up.

Under-estimates of the amount he needs to borrow have become all too familiar in the chancellor's statements in recent years.

But this time he will probably stick will his budget deficit forecast of �7bn for this year.

Tinkering with the interpretation of his Golden Rule on balancing the budget over an economic cycle will probably ensure he is in the clear on that front.

Global challenges

But what of the longer term, quite possibly under a Gordon Brown premiership?

Politicians and pundits alike will hunt for clues in this pre-Budget report.

He will paint a big canvas, quoting from the raft of policy reviews he has commissioned. (Eddington on transport, Barker on planning and Leitch on skills to name but three).

The emphasis will be on the need to equip the UK for the global economic challenges ahead.

Buried in the PBR paperwork, however, will be crucial numbers on public spending. Years of plenty in the public sector are set to give way to years of frugality.

The chancellor will pencil in annual growth figures for the years of the new comprehensive spending review period, from 2008/09 onwards.

The detail will come next year but the outlines will be found here. They are likely to confirm a tight grip on the purse strings assuming Mr Brown is still resident at Number 10 or 11 Downing Street.