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With analysis last week showing a no-deal Brexit would drag the economy to a near-standstill next year, in that scenario “we’d need to have a new budget that set out a different strategy for the future,” Hammond said.
“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.
The Bank of England may also need to take action, potentially through a change in interest rates, he said.
Hammond is facing pressure to end almost a decade of spending cuts that have limited public services and spurred support for the opposition Labour Party and its socialist leader, Jeremy Corbyn. Labour, which is neck-and-neck in the polls with the Conservatives, said Britain must spend more than 100 billion pounds ($128 billion) on public services to reverse the impact of a decade of austerity.
The party’s finance spokesman, John McDonnell, said Hammond appeared to want a no-deal Brexit and accused him of “complacency” over talks with the EU.[...]
OBR Economic and fiscal outlook – October 2018
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