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A No Deal Brexit will force Tories to hold new Budget - and could CANCEL the much-trumped 'end of austerity', the Chancellor admitted today.

Philip Hammond confessed Theresa May's supposed promise to put the brakes on eight years of cuts might only happen if we get a good deal with the EU.

And with talks in deadlock just five months before Brexit Day on 29 March, Mr Hammond admitted No Deal will force him to hold tomorrow's Budget all over again.

"If we were to find ourselves in that situation then we would need to take a different approach to the future of Britain's economy," he told Sky News.

"We would need to look at a different strategy. And frankly we'd need to have a new budget that set out a different strategy for the future."

Shadow Chancellor John McDonnell accused Mr Hammond of a "shocking" display of "callous complacency" that was "cut off from the real world".

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"He seems to gave accepted a No Deal Brexit and he does want us to be like Singapore - a tax haven that will undermine our manufacturing base and put living standards at risk," Mr McDonnell said.

"The last thing we need now is these threats from Philip Hammond or others that they’re willing to prepare for a No Deal."

He added "of course" austerity won't be over and £20billion for the NHS "isn't enough". "A lot of that money will be taken up by covering past deficits," he said.

Tory Brexiteer Jacob Rees-Mogg raised a comparison to George Osborne's "punishment Budget" - a threat to slash spending if Brexit happened.

Mr Rees-Mogg said the two were not the same but "I would have thought it would be better to take the opportunities ahead of us now, rather than waiting."

Chancellor Mr Hammond made his comments on Sky News' Sophy Ridge on Sunday ahead of presenting his Budget at 3.30pm tomorrow.

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Asked if austerity would still end in a No Deal, he said: "We would have to wait and see what the situation was.

"If we if we left the European Union without a deal we would want to see how markets and businesses and consumers responded to that.

"And then as any responsible government would 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."

Mr Hammond's comments confirm what Downing Street stopped short of saying when Theresa May claimed she would end austerity at the Tory conference.

Labour leader Jeremy Corbyn has already branded the promise to end austerity a "con" in a furious PMQs row because police, nurses and teachers have received smaller pay rises than experts asked for.

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TUC General Secretary Frances O'Grady told Sky News: "He's surely been given Mission Impossible by the PM unless we get a Brexit deal that puts jobs first."

Tory ministers have made no change to plans to freeze benefits for four years - slicing almost £4billion a year from welfare claimants.

And the respected Institute for Fiscal Studies has already exposed Mrs May's promise as a sham - saying she would need to magic up £19billion a year just to achieve a “minimal definition” of ending austerity.

Chancellor Philip Hammond today claimed his 2018 Budget will show the UK's "hard work is paying off" as he turns on spending taps for roads, high streets and fuel.

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But he faces angry demands to go further by pumping more money into the Universal Credit benefit, which has driven people to debt and food banks.

Mr Hammond admitted any so-called "end of austerity" would only come next year in a full spending review, not in tomorrow's Budget.

He told Sky News: "What I will do in the budget tomorrow is set out broadly a spending envelope going forward.

"But the detail will be for the spending review because that's when we quite properly look at the envelope of money available and decide collectively what our priorities are for the next few years.

"That to me is the responsible way to budget."