UK chancellor warns of no-deal danger

THE UK will need new tax and spending plans and may have to extend austerity policies if it fails to secure a Brexit deal with the EU, Chancellor of the Exchequer Philip Hammond said yesterday.

With analysis last week showing a no-deal Brexit would drag the economy to a near-standstill next year, Mr Hammond said that in that scenario the UK would “need to have a new budget that set out a different strategy for the future”.

“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,” he told Sky News’s ‘Ridge on Sunday’ on the eve of his annual budget speech today.

The Bank of England may also need to take action, potentially through a change in interest rates, he said.

Mr Hammond is facing pressure to end almost a decade of cuts that have limited public services and spurred support for the opposition Labour Party and its socialist leader, Jeremy Corbyn.

Britain’s Labour Party, neckand-neck in the polls with the Conservatives, said Britain must spend more than £100bn (€112bn) on public services to reverse the impact of a decade of austerity.

The party’s finance spokesman, John McDonnell, accused Mr Hammond of “complacency” over talks with the EU.

Bloomberg