Philip Hammond says Britain may reset fiscal policy in Autumn Statement

Before Theresa May became prime minister, she said her Government would no longer seek to reach a budget surplus by 2020

Britain's Chancellor of the Exchequer, Philip Hammond (L) and Bank of China Chairman Tian Guoli attend UK-China High Level Financial Services Roundtable at the Bank of China head office building in Beijing, China July 22, 2016 (Reuters)

Britain could 'reset' fiscal policy in the wake of Brexit, according to the Chancellor Philip Hammond, in his strongest comments yet that policies are set to change following the vote to leave the EU.

"Over the medium term we will have the opportunity with our Autumn Statement, our regular late-year fiscal event, to reset fiscal policy if we deem it necessary to do so in the 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 said on a trip to China.

His comments follow earlier statements in which Mr Hammond asserted he would not be keeping all of his predecessor George Osborne's austerity policies.

“This is a new phase,” he said.

Before Theresa May became Prime Minister, she said her Government would no longer seek to reach a budget surplus by 2020.

Mr Osborne admitted that the Government was unlikely to cut the deficit before he was removed from office.

In his first set of interviews after the shock vote, the former Chancellor said Britain's economy would have to adjust to the new situation it was in. "It will not be plain sailing in the days ahead," he said.

Philip Hammond has travelled to China to meet policymakers from leading market economies in China and make the case that Britain, post-Brexit, is still very much open for business.

G20 negotiators are meeting in Chengdu, central China to discuss global economic issues. The outcome of the EU referendum is expected to be top of the list.

But Kamel Mellahi, a professor of strategic management at Warwick Business School, said Mr Hammond should concentrate more on reassuring investors rather than hawking the UK out for business.

"It’s not going to be easy to convince Chinese businesses to invest in Britain. In the past Chinese investors considered the UK as one of their favourite investment destinations and invested in all sorts of activities. Now they need to have a good reason to invest in the UK," Mr Mellahi said.