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Theresa May has warned of “difficult” economic times ahead for Britain as she arrived at the G20 summit of world leaders in China.

The new Prime Minister said the economy has fared better since the June 23 Brexit vote than many of the worst doom-mongers predicted - but stressed the future will not be “plain sailing”.

Mrs May is poised to trigger the formal two-year countdown to leaving the EU at the start of next year, and Whitehall sources fear business confidence could falter as the date moves closer.

Speaking as she arrived in the Chinese city of Hangzhou this morning, Mrs May said: “I think the reaction of the economy has been better than some had predicted post the referendum – but I won't pretend it's all going to be plain sailing.

“There will be some difficult times ahead.”

(Image: PA)

Chancellor Philip Hammond – who is also on the trip to China, along with Bank of England Governor Mark Carney – warned last month he may need to tear up the last Government's tax-and-spend policies if the economy starts to tank this autumn.

The possible 'fiscal re-set' would be delivered in his first Autumn Statement in late November or early December, and Mrs May said no final decision has yet been made.

“We'll be looking at this issue. We have to take all the data into account,” she said.

“Obviously by the time of the Autumn Statement we'll have more data available and we'll have a better picture of what's happening in the economy.”

But making clear there will be no end to Tory austerity, she added: “What I'm clear about is we're going to continue as we have done in Government over the last six years - ensuring that we're a country that can live within our means.”

(Image: REUTERS/How Hwee Young)

The build-up to the G20 summit has been overshadowed by the delay in the decision over the Hinkley Point power station, which the Chinese state-owned nuclear firm is investing in.

Mrs May said the delay was down to "the way I operate" - because she wanted a fresh look at the evidence for the £18 billion plant.

Speaking to reporters on the plane heading to Hangzhou, she said: "I don't just come in and say 'I'm going to take a decision', I actually look at the evidence, weigh up the evidence, take the advice and then consider that and come to my decision.

(Image: EDF Energy/PA Wire)

"That's exactly the process I'm going through. I have said a decision will be taken in September and it will."

Mrs May will hold face-to-face talks with Chinese president Xi Jinping at the conclusion of the summit on Monday, when the issue is likely to be raised.

Concerns have been raised about the cost of energy from the proposed Somerset plant and the security implications of allowing a Chinese firm to invest in critical infrastructure.

(Image: PA)

Asked if she would specifically raise security concerns she said "I am going to be talking to President Xi about a whole range of issues. I'm not going to be taking the Hinkley decision - it's not going to be taken now, it's going to be taken later this month, but it will be taken this month.

"But I have been clear that what I am doing is looking at the evidence, looking at the issues around Hinkley and we will take a decision."

It is understood the National Security Council has not examined Chinese investment since Mrs May replaced David Cameron in Number 10.

(Image: Getty Images)

Both Mr Cameron and his chancellor Mr Osborne were enthusiastic supporters of a new "golden era" in relations with Beijing.

Mrs May insisted she wanted that strategic partnership to continue.

Asked if she trusted the Chinese she said: "Of course we have a relationship with them, we are working with them and we have seen significant Chinese investment into the UK.

"What I want to do is build on that relationship, but I also want, here at the G20, to be able to build on relationships with other countries.

"As I say, I want us to be as a country unashamedly proponents of free trade and out there, a global leader on free trade."