Britain's Hammond says UK can cope with no-deal Brexit

Relations suffered earlier this year when then-foreign minister Boris Johnson was quoted dismissing business leaders' concerns about Brexit, using foul language, in a meeting with EU diplomats.

Johnson, the bookmakers' favourite to succeed May, has become a cheerleader for hardline Brexit supporters in the Conservative Party who have denounced her so-called "Chequers" proposals and has put forward his own plans for an alternative free trade deal.

Hammond said Johnson's idea was not on offer from the EU.

"What Chequers does is offer an in-the-middle solution, down the centre, taking the best from both models, and proposing a way forward which delivers on the mandate of the British people in the referendum but also protects British jobs and British businesses," he told Sky News.

Last week, Britain's opposition Labour Party sought to woo business bosses even as it unveiled a raft of radical economic policies, saying the Conservatives had given them the opportunity to pitch an alternative leftist strategy.

Despite Brexit dominating political discussions, polls suggest it lags behind the state-run National Health Service as Britons' greatest concern and Hammond said people would have to pay more in tax to fund extra investment.

"The prime minister was very clear and very honest with the public that if we want in the future a growing NHS to support our ageing population of course we'll have to accept a little more tax to fund that service," he said.