Image: Foreign and Commonwealth Office Image: Foreign and Commonwealth Office

Chancellor Philip Hammond has said the Autumn Statement could be used to "reset" the UK's economic policy "if we deem it necessary to do so".

Prime Minister Theresa May has already said that the government will abandon George Osborne's target of a budget surplus by 2020. Now, Mr Hammond has said he will consider the best action after reviewing economic data in the coming months.

He said: "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."

His comments came before a closely watched survey showed the UK economy contracted at its fastest rate since April 2009 in July, suggesting a 0.4% contraction in the third quarter.

Earlier this week, figures released by the Office for National Statistics (ONS) showed that while government borrowing fell in the year-to-date so far, it is still expected to exceed the Office for Budget Responsibility (OBR)'s forecast of £55 billion by £14bn for the current financial year. It also revealed that the UK's debt is now equivalent to 84% of GDP.

Trumpeting economic strengths

The Chancellor's comments came as he left for China to meet with G20 finance ministers, and strengthen ties with China, where he will "trumpet Britain’s fundamental economic strengths", the Treasury said.

Mr Hammond said: "My focus in China will be on promoting British business opportunities, including in the financial services sector, where Britain is a world leader. Britain is open for business and one of the most attractive destinations in the world for international investment.‎

"We have built a strong economic relationship with China and as Chinese investments into the UK continue to diversify and as UK exports grow, Sino-UK relations are more important than ever.

"In the last few days alone we have seen the Australian Prime Minister say he wants a new trade deal with Britain - and Japanese technology firm Softbank announce plans for a record investment in the UK. This is all evidence that our economy is fundamentally strong and well equipped to adapt to the change that will be necessary as we leave the EU."