Hammond: I’ll change my mind if it’s a no-deal

Philip Hammond has suggested he would change his mind on whether Brexit was worth it if the only exit on offer was a chaotic no-deal.

Giving evidence to MPS, the Chancellor said the “future success of our country depends on us executing the instruction of the British people in the referendum”. But he admitted he would “take a different view” if a no-deal Brexit was set to leave the economy nearly 10 per cent smaller after 15 years, as the UK government analysis suggests.

Mr Hammond also said the Treasury would be forced to open the spending taps to shore up the economy in the event of a no-deal Brexit, which would see a collapse in the pound and higher interest rates.

He said the expected spike in inflation would also make it “very difficult” for the Bank of England to reduce interest rates as it did following the 2016 referendum, leaving it to fiscal policy – taxation and spending – to “carry much of the short-term burden”.

The UK would need a restructuring on a scale last seen in the 1980s, Mr Hammond added.