Chancellor plans 'flexible' strategy to protect post-Brexit economy

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Chancellor Philip Hammond is reported to be planning to adopt a new "flexible fiscal framework" to give him the ability to respond if the economy is hit by Brexit.

The Financial Times said Mr Hammond would unveil the new framework in his autumn statement on November 23, when he will formally abandon predecessor George Osborne's target to run a surplus by 2019/20.

The Chancellor is expected to seek to shore up the economy with new infrastructure spending, but he told Cabinet colleagues on Tuesday to expect only a "modest" stimulus running into the low billions of pounds a year, said the paper.

But it quoted an unnamed official as saying that the new fiscal plan would provide him with the freedom to step up stimulus if economic growth faltered. 

"The goal is to create some headroom so it can be deployed if necessary," the anonymous official said. "The Chancellor made it clear we face an unprecedented level of uncertainty."

According to the FT, the plan aims to achieve a balanced budget during the next Parliament, which is due to run from 2020 to 2025.

Mr Hammond's decision to brief Cabinet three weeks ahead of his first major fiscal statement marks a sharp departure from the practice of predecessors Mr Osborne and Gordon Brown, who preferred to keep their plans strictly under wraps until the day of the announcement.

A Treasury spokesman declined to comment on the contents of the autumn statement.