Philip Hammond has said he does not believe in "the money tree" as he told MPs he has no plans to reverse George Osborne's spending commitments.
Mr Hammond used his despatch box debut as Chancellor of the Exchequer to ridicule shadow chancellor John McDonnell.
Mr McDonnell asked Mr Hammond to "put an end to what is becoming a lost decade of austerity" and to scrap the "anachronistic fiscal rule" which requires the Government to achieve a budget surplus by 2020.
But Mr Hammond said: "Since this is our first outing together, let me take the opportunity of making clear to you that I do not believe in the money tree.
"I am clear that we have to pay our way in the world.
"We have a very large fiscal deficit that we have to address but while doing it we also have to ensure that we maximise the productive capability of the UK economy.
"That means targeting our investment into skills, and that does largely mean young people, into infrastructure and into encouraging capital formation in private businesses."
Speaking during Treasury questions in the House of Commons, Mr Hammond also said he intended to follow the spending plans set out by Mr Osborne - at least until the Autumn Statement.
He said: "I have no plans to reverse the spending plans set out by my predecessor at the moment.
"Any such plans will be announced in the Autumn Statement."
Mr Hammond faced criticism from the SNP benches that the Government had been slow to react to turbulence in the economy in the wake of the nation's Brexit vote on June 23.
The newly appointed Chancellor said the Treasury is waiting for the release of data at the end of the summer to inform its next moves.
He said: "There are a series of data publications during the late summer and autumn which will inform a proper response at the Autumn Statement."
He added: "I will work closely with the Bank of England to provide immediate stability and to maintain confidence in the fundamental health of the UK economy as we prepare for the Autumn Statement.
"As further post-referendum economic data is published, the short-term response of the economy to the Brexit decision will become clearer and if further measures are required they will be announced at the Autumn Statement."
But Mr Hammond also admitted that the Government may not meet its surplus target.
He said: "The surplus rule always came with the caveat that if OBR forecast a rolling four consecutive quarters of less than 1% annualised growth the target would be suspended.
"The consensus of pretty much all forecasters is that that is likely to be what they forecast this Autumn Statement."
He added: "How we are going to respond over the longer term to the resulting deficit will be set out I'm afraid to say at the Autumn Statement."