Philip Hammond could reset Britain's economic policy in Autumn Statement

Britain's new chancellor, Philip Hammond, has said he could use the Autumn Statement to "reset" the country's economic policy.

Speaking at the beginning of a trip to China aimed at strengthening economic ties with Beijing following the European Union referendum, Hammond said the Treasury would monitor economic data over the coming months and act "if we deem it necessary to do so".

"Over the medium term we will have the opportunity with our Autumn Statement, our regular late-year fiscal event, to reset fiscal policy if we deem it necessary to do so in the light of the data that will emerge over the coming months," he added.

Hammond, who will attend his first meeting with the G20 finance ministers this weekend, declared last week that Britain was "open for business" and was "one of the most attractive destinations in the world for international investment".

However, the chancellor could have a difficult task on his hands, as he bids to stabilise Britain's economy, while negotiating a deal to leave the EU. Data released on Friday showed Britain's economy was shrinking at the fastest rate since the financial crisis in the wake of the pro-Brexit vote.

Markit's Purchasing Managers' Index (PMI) for the services sector tumbled to 47.4 in July from 52.3 in June, recording the steepest drop since records began in 1996 and the worst reading since March 2009.

The decline was way sharper than expected by economists, who had forecast a drop to 49.2.

Figures released on Thursday, meanwhile, showed public borrowing was lower than expected in June, although it is still expected to exceed the government's £55.5bn full-year borrowing forecast by £14bn.