Chancellor ready to 'reset' policy if economy hit by post-Brexit downturn

Tax and spending policy could be "reset" if the economy takes a downturn following the EU referendum result, Philip Hammond has said.

The new Chancellor revealed he is ready to use the Autumn Statement mini-Budget to set the economy on a different course if analysis shows the Brexit vote has had an impact.

Mr Hammond is on a visit to Beijing to forge links with China ahead of a meeting of G20 finance ministers in Chengdu.

He said: "Over the medium term we will have the opportunity with our Autumn Statements, our regular late-year fiscal event, to reset fiscal policy if we deem it necessary to do so in light of the data that will emerge over the coming months showing us exactly what is happening in the economy post the referendum decision."

Mr Hammond inherited a shaky set of public finances, with borrowing hitting a worse-than-expected £9.7 billion in May and a current account deficit which, at 6.9% of gross domestic product, remains close to the all-time high of 7.2% seen at the end of last year.

Earlier this week, the Chancellor told MPs he had "no plans to reverse the spending plans set out by my predecessor at the moment" but experts are expecting him to take a softer approach to belt-tightening than predecessor George Osborne.

Prime Minister Theresa May has said she is ready to ditch budget surplus targets if necessary to avoid tax rises.