Philip Hammond has told Sky News a shift in economic policy is needed to see the UK "through a period of turbulence and uncertainty" in the wake of the Brexit vote.

In breaking from his predecessor George Osborne, the Chancellor said a new plan was needed to "fit the circumstances Britain now has".

Going into the negotiations to leave the EU, Mr Hammond said the UK was in a strong position with the economy "running at eight out of 10", but warned of long-term challenges including poor productivity.

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He echoed Theresa May in rejecting the idea of a "hard" or "soft Brexit" and said: "What we have to get is the right Brexit for Britain."


Mr Hammond also said while the Government would be pressing for "maximum possible access" to European markets, he stressed the Brexit talks would be "within the parameters that the British people have set", including immigration controls.

Following his appearance on Sky News, the pound fell to a new post-Brexit vote low, but rallied shortly afterwards.

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The shift in economic policy comes only days after Mr Hammond confirmed he is scrapping Mr Osborne's flagship Help-to-Buy scheme at the end of the year.

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The breakaway is the latest example of Mr Hammond seeking to stamp his authority and his personality on the Treasury and the Government's economic policy.

On becoming Chancellor in July he made clear he would ditch Mr Osborne's target to get the UK's finances into surplus by 2020.

Image: Mr Hammond has ditched his predecessor George Osborne's photo-calls in a high-viz jacket and hard hat

Speaking ahead of his speech, Hr Hammond told Sky News: "Following the vote to leave the European Union, our economy is facing a period where inevitably there will be some uncertainty.

"That is happening at a time when there are some other uncertainties around the global economy.

"So we need to set a policy framework which maintains the focus on fiscal discipline, bringing our public finances back into balance, but does it in a way that allows us to support the economy through this period, to make sure that people's jobs are safe, that economic growth is secured."

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He added: "We have to get our public finances into order.

"But it no longer makes sense to try to run a surplus in 2019-20, which was George Osborne's policy.

"The circumstances have changed since that policy was set and it is right now to set a new policy framework that fit the circumstances Britain now has."

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On the upcoming Brexit talks, Mr Hammond said: "The British people have given us a clear message about sovereignty, about control of our borders, and we have to negotiate within the parameters that the British people have set.

"But we have said very clearly that we will seek the best deal we can for British businesses and British workers, to have the maximum possible access to the markets of European countries, for our goods and our services so that we can keep British growth and British jobs growing strongly over the coming years."

Expensive housing and a recession mean thirty-somethings are missing out

Mr Hammond will also join the Communities Secretary Sajid Javid later in announcing a package of new measures to build more houses, more quickly, in places people want to live.

These include:

The launch of a £3bn Home Building Fund to help to build more than 25,000 new homes this Parliament and up to 225,000 in the longer term;

Direct action to fix the housing market, using public land and £2bn of investment to encourage the building of up to 15,000 homes;

Bringing forward urban regeneration and levelling the playing field between brownfield and greenfield development to regenerate inner cities.

In his speech at the conference, Mr Javid will say: "Tackling the housing shortfall isn't about political expediency. It's a moral duty. And it's one that falls on all of us.

"Not just in Parliament, but in business, in local government and in our communities. So my message today is clear: it's time to get building."