Philip Hammond announces Autumn Statement on 23 November

Chancellor Philip Hammond has hit back at Francois Hollande after the French president suggested that euro clearing could move to Continental financial centres in the aftermath of Brexit.

In July, Mr Hammond said he may use the Autumn Statement to “reset” economic policy, in light of the UK’s vote to leave the European Union on 23 June.

In his debut appearance in front of the Lords’ Economic Committee – and less than 24 hours after Theresa May said she would not be providing a “running commentary” on Brexit negotiations – Mr Hammond appeared to reassure the financial markets by revealing preferential treatment for “highly skilled” people.

“So I don’t think we should be cavalier about the level of the debt”, he said. At the moment the government runs a deficit on the public finances because what it takes in each year in tax and other income is less than what it spends.

In a sign of tense negotiations that lie ahead as Britain tries to negotiate its exit from the European Union while keeping as much access as possible to its single market, Hammond said London’s “complex ecosystem” of banks and financial services could not be replicated elsewhere.

“Financial services are one of Britain’s great success stories – its exports account for over 12% of the United Kingdom total; it employs over 1 million people, two thirds of whom work outside of London and the South East; and contributes over £60 billion in tax each year to help fund public services”.

Hammond prompted speculation that he might be planning a major increase in spending or big tax cuts when he made the comment about a possible reset of fiscal policy in July.

Asked what infrastructure projects the government could use as fiscal stimulus for the economy, Hammond said: “Any sensible chancellor would seek to do as much as possible through investment that will not only deliver short-term demand stimulus but will also address longer-term, structural problems in the economy”.