Britain will not “slink off like a wounded animal” after leaving the European Union, Philip Hammond has said, as he vowed to build a £60billion Brexit war-chest in case the EU gives the UK a bad deal.

The Chancellor said he would take a cautious approach to spending in Wednesday's Budget to ensure UK has “got enough in the tank” to get out of EU.

However he hinted there would be more than £1billion for social care, along with an extra £300million for pubs and shops hit by a controversial hike in business rates.

This fuelled speculation in Westminster that Mr Hammond will have to raise taxes indirectly in order to balance his Budget, perhaps by increasing National Insurance Contributions for the self-employed.

There have been calls for more tax cuts and greater spending after an expected downturn after Britons voted to leave the EU in June failed to materialise, with the UK set to grow by 2 per cent this year.

