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Philip Hammond tells ITV News talks on transitional Brexit deal should begin in Autumn

Chancellor Philip Hammond - having won the argument within Cabinet for a transitional deal with the EU - has told ITV News he hopes talks on it can begin in the autumn.

Asked how quickly a transitional deal could be done to give businesses certainty, Mr Hammond said: "The European Union timeline is clear that we have to make sufficient progress on the initial set of issues that David Davies has been discussing in Brussels.

"We hope to have achieved that milestone by September or October, and we then expect to be able to go on to talk about this broader range of issues."

He went on: "We hope to be able to deliver agreement about an interim arrangement with the EU as early as possible."

Brexit Secretary David Davis has been discussing the initial set of issues with EU negotiator Michel Barnier. Credit: PA

With GDP growth in the first half of this year at its lowest for five years, business could do with the certainty.

Especially as consumers may not be able to sustain their support for the economy indefinitely.

As inflation nudges 2.9%, it turns out wages fell 0.7% in the second quarter of 2017.

Mr Hammond also admitted the fall in the pound after the Brexit vote had had painful consequences.

"Consumers are being affected by the inflation that was created by the depreciation of the currency in the Autumn of last year," he said.

"That will pass through the economy, but I absolutely recognise it's painful as it's passing through the economy."