LONDON • British Prime Minister Theresa May will use a major speech on Brexit tomorrow to call on Britons to reject the acrimony of last year's referendum and unite around the vision of a Britain more open to the world, her office said yesterday.

She is due to make the speech in London before an audience that includes foreign diplomats as well as Britain's own Brexit negotiating team and other senior officials, Downing Street said in a statement.

It said she would stress the need for Britons, who voted for Brexit by 52 to 48 per cent after a deeply divisive campaign, to unite around common goals such as protecting and enhancing workers' rights.

"Now we need to put an end to the division and the language associated with it - 'Leaver' and 'Remainer' and all the accompanying insults - and unite to make a success of Brexit and build a truly global Britain," Mrs May is expected to say.

The Sunday Times reported that the British leader will signal plans for a "hard Brexit'' by saying she is willing to quit the European Union's single market for goods and services to regain control of Britain's borders and laws.

Mrs May will prepare to withdraw from tariff-free trade with the region in return for the ability to curb immigration, strike commercial deals with other countries, and escape the jurisdiction of the European Court of Justice, The Sunday Times said without revealing how it obtained the information.

Her speech will be closely watched by financial markets for information on which of these divergent goals she will prioritise.

After she said in a TV interview a week ago that post-Brexit Britain would not be able to keep "bits" of its EU membership, the pound fell sharply as the comment was interpreted as signalling a clean break from the single market.

Tomorrow's speech will take place at Lancaster House, a grand Foreign Office property close to Buckingham Palace that has hosted numerous international summits. Downing Street said the choice of venue was to underline Mrs May's theme of a global Britain.

To avoid a fallout from the break- up and grant businesses some certainty over the outlook, Mrs May will seek a transitional phase between splitting from the EU and the beginning of a new trading relationship, The Sunday Times said, citing Brexit Secretary David Davis.

In a report released on Saturday, a panel of British lawmakers charged with scrutinising Brexit said her government must outline its road map by the middle of next month.

Britain could change its economic model to regain competitiveness if it were to leave the EU without an agreement on market access, British Finance Minister Phillip Hammond said in a German newspaper interview published yesterday.

In a thinly veiled threat that Britain could use its corporate tax as a form of leverage in Brexit negotiations, Mr Hammond told the Welt am Sonntag he hoped Britain would remain a European-style economy with corresponding tax and regulation systems.

"If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short term," he said when asked directly about Britain's plans to lower corporate tax.

"In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness," Mr Hammond said. "We will change our model, and we will come back, and we will be competitively engaged."

Mr Hammond said Britain did not want to close its doors completely to EU citizens who wanted to work in the United Kingdom.

"Clearly, we need people to come and work in our economy to keep it functioning," Mr Hammond said.

"But we must have overall control," he added.

REUTERS, BLOOMBERG