Hammond says UK will need new Budget strategy in event of no-deal Brexit

Chancellor Philip Hammond has warned that the Government will have to adopt a new economic strategy if Britain leaves the European Union without a deal with Brussels.

On the eve of the Budget, Mr Hammond said he would have to tear up his plans for the economy and set out a new Budget if there was no Brexit deal when the UK leaves the bloc in March 2019.

“If we were to leave the European Union without any deal – and I think that’s an extremely unlikely situation but of course we have to prepare and plan for all eventualities as any prudent government would – if we were to find ourselves in that situation then we would need to take a different approach to the future of Britain’s economy,” he told Sky News’s Sophy Ridge on Sunday programme.

“We would need to look at a different strategy and frankly we’d need to have a new Budget that set out a different strategy for the future.”

He added: “We would want to see how markets and businesses and consumers responded to that.

“Then, as any responsible government would, we would take appropriate fiscal measures to protect the economy, to prepare us for the future and to strike out in a new direction that would ensure that Britain was able to succeed, whatever the circumstances we found ourselves in.”

The Chancellor also hinted he would use his Commons statement on Monday to provide additional funding to smooth the transition to Universal Credit amid warnings low income families are being driven into debt.

“I’ve already put over £2 billion pounds into, over the last two Budgets, into smoothing that transition,” he said.

“We continue to look at how this process is working and if we find cliff edges and difficulties, frictions in the move from the old benefits system to Universal Credit then of course will always try to smooth those out and be pragmatic about it.”