Speaking at a fringe meeting at the Conservative party conference in Birmingham yesterday evening, Hammond said he rejected the argument that the UK was not in such dire financial straits as America.
He said: “I do not share in the view that the situation in the UK is not as grave as in the US.
“I think there are very many factors that suggest the situation in the UK in the medium term may very well be more grave than in the US, principally because our economy is so unbalanced compared to the US economy which has a much broader base and is much more likely to be able to weather a sectoral storm than we are.”
Hammond also attacked the Government for taking so long to bring the Special Resolution Regime into force.
He argued that one year on from Northern Rock, it was “a clear failure of policy” that the Government had to resort to using emergency measures to deal with Bradford & Bingley on a Sunday afternoon rather than having the necessary regime in place to follow.