Sajid Javid, the UK's Chancellor of the Exchequer, has said there would be a significant policy response from the British government if the country left the EU without a deal.

Setting out plans for infrastructure investment on the second day of the governing Conservative party's conference  he said that the government had made  preparations for a no-deal Brexit.

"What I am confident about is that with all those mitigations, whether it's at the ports or elsewhere, we will be able to deal with many of the disruptions around no deal," he said, "I am also clear that, if it was no deal, there would be significant economic policy response."

Mr Javid also said the British government should obey the law but is taking a careful look at one which forces the prime minister to ask for a Brexit delay if a deal is not struck with the European Union by Oct. 19.

"Of course, every government should observe all laws at all times. We're taking a careful look at that law, but we are also very clear that our policy has not changed - we will leave on Oct. 31st," he said, declining to set out the government's strategy to leave without a deal if it has to.

Mr Javid's speech came as official data showed the UK economy shrinking over the second quarter of the year, as Brexit approaches.

The Office for National Statistics (ONS) said the economy grew 0.3 percent in July, helped by the dominant services sector. However, over the second quarter, from April to June, the economy contracted by 0.2 percent.

"GDP growth was flat in the latest three months, with falls in construction and manufacturing," ONS statistician Rob Kent-Smith said. "While the largest part of the economy, the services sector, returned to growth in the month of July, the underlying picture shows services growth weakening through 2019."

The services sector grew by 0.3 percent in the month of July, with widespread growth in several industries – notably administrative and support service activities. However, this follows four consecutive months of stagnation.

The new ONS data also showed Britain's households have become net lenders to the economy, rather than net borrowers.

"People have been donating less to charity than previously thought as well as receiving more money from renting out homes," Kent-Smith said.

Changes to the measurement of student loans also contributed to change in the status of households to net lenders, although the figures still showed a "significant" deterioration since the 2016 Brexit vote.

The economy grew by 1.3 percent in the year to the end of June, revised up from an earlier estimate of 1.2 percent.

The figures confirmed spending from households and the government – the latter rising at the fastest annual rate since late 2008 – were among the few positive drivers of growth in Britain's economy in the second quarter, with business investment falling again.