The UK may be forced to change its “economic model” if it is locked out of the single market after Brexit, Chancellor Philip Hammond has said.

Mr Hammond said the government would not “lie down” and would “do whatever we have to do” to remain competitive.

He had been asked by a German newspaper if the UK could become a “tax haven” by further lowering corporation tax.

Labour’s Jeremy Corbyn said his comments sounded like “a recipe for some kind of trade war with Europe”.

Having so far refused to offer a “running commentary” on her plans, Prime Minister Theresa May is expected to spell out the most detail so far of her Brexit strategy in a speech on Tuesday.

Reports have suggested she will signal pulling out of the EU single market and customs union, although Downing Street described this as “speculation”.

 

Read more: http://www.bbc.com/news/uk-politics-38628428