LONDON?The U.K. economy faces uncertainty as it negotiates its withdrawal from the European Union so the government must protect any gains but also invest in infrastructure so it is prepared for any opportunities or challenges once it has left the bloc, Treasury chief Philip Hammond said on Sunday.

The Chancellor of the Exchequer is due to unveil the Autumn Statement on Wednesday, the government's?and Mr. Hammond's?first major fiscal-policy announcement and economic update since Britons voted to leave the EU in June, a move that many predicted would damage Britain's economy.

The Treasury has said Mr. Hammond will set out a new fiscal framework to give the government flexibility to respond to changing economic conditionsand the need to invest in the economy's productive capacity.

In an interview with the British Broadcasting Corp., Mr. Hammond said forecasts were pointing to a slowing of economic growth next year and a "sharp challenge" for the public finances.

"We have got to make sure what we do is responsible?that everything we do is compatible with building resilience in our economy?as we go into a period when there will be some uncertainty around the negotiation over our exit from the EU, and focus on making sure our economy is match-fit for the opportunities and the challenges that will lie ahead," he said.

Earlier on Sunday the Treasury announced the government would be spending £ 1.3 billion on improving Britain's roads as part of a wider multibillion pound infrastructure investment plan to be unveiled by Mr. Hammond on Wednesday.

In an article published in the Financial Times late on Sunday, Prime Minister Theresa May said the government also planned to invest an extra £ 2 billion a year on research and development by the end of the parliamentary term in 2020 and set up a new fund to help commercialize new technologies such as robotics and artificial intelligence.

She is due to outline those plans at the annual conference of the Confederation of British Industry on Monday, she said, and call on the business community to work with the government to mend their reputation which she said had been undermined by a small minority who "appear to game the system and work to a different set of rules."

That would involve establishing the best corporate governance of any major economy, ensuring the voices of employees and consumers are properly represented in board deliberations, and reforming executive pay, she said.

The Autumn Statement would also provide targeted help to ordinary working families who are struggling to get by, Mrs. May said without giving details.

Mr. Hammond said he understood the desire for more information about the process but said he wanted the prime minister to have maximum flexibility when she enters negotiations.

He also said European leaders were being commendably disciplined in their statements on free movement and European market access.

"We trade huge amounts together, and I'm confident that we will be able to agree an arrangement with our European partners that ensures that our companies will continue to trade in and have access to European marketplaces," Mr. Hammond said.

The Chancellor said maintaining European market access for the U.K.'s large financial sector would be a key demand in the negotiations but stressed it was also of deep value to Europe, adding that negotiations had to find a "win-win outcome."

On Sunday, in an article in The Telegraph newspaper, 60 lawmakers from Mrs. May's Conservative party, including seven former ministers, called for the government to pullout of the European single market and customs union when it leaves the EU.

"I would urge my colleagues to give the prime minister the flexibility she needs to get the best deal for Britain in what will be a very complex negotiation," Mr. Hammond said, adding that no decision had been taken on staying in the customs union.

Write to Nicholas Winning at nick.winning@wsj.com

(END) Dow Jones Newswires

November 20, 2016 20:35 ET (01:35 GMT)

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