Sunday 05 March 2017 1:20 pm

Bullish Hammond warns the UK will “fight back” if unable to secure a Brexit deal

Chancellor Philip Hammond has warned European member states the UK "has a fighting spirit" and will not "slink off as a wounded animal" if Brexit talks collapse.

Prime Minister Theresa May will fire the starting gun on negotiations later this month, and Hammond today warned that Britain will do "whatever it takes" to remain competitive.

"If there's anybody in the EU who thinks that if we don't do a deal with the EU, if we don't continue to work closely together, Britain will slink off as a wounded animal, that is not going to happen," Hammond told the BBC.

"Britain has a fighting spirit and we will fight back. We will do whatever it takes to make this country competitive."

Speaking after a House of Lords report suggested the UK could walk away from the EU without paying a so-called divorce bill if negotiations founder, the chancellor added he was unconvinced by some of the figures that have been mooted, but said the government would honour any obligations.

"We're about to enter into a negotiation. Very often when you're about to start a negotiation with people they set out very large demands and very stark positions ahead of that," he said.

"The PM has been clear – we are a nation that honours our obligations and if we do have any bills that fall to be paid we will obviously deal with him."

And with the Budget due on Wednesday, Hammond appeared to scotch any suggestions of a spending spree, vowing to ensure Britain has enough “gas in the tank” to weather any economic disturbance.

Hammond has reportedly been handed a fillip by larger than expected tax returns, but the chancellor remained cautious.

“It's not money in the wallet, because we're borrowing an awful lot of money. We're spending over £50bn a year just on servicing the interest on our debt,” he said.

“If your bank increases your credit card limit, I don't think you would expect to go out and spend every penny of it immediately.”