UK economy approaching full capacity, says Hammond

LONDON (Reuters) - Britain's economy is approaching full capacity, chancellor Philip Hammond said on Tuesday ahead of his Nov. 22 budget announcement when asked about using public money to finance homebuilding.

"Increasing activity in the construction sector is a very good way of creating jobs but ... at 4.3 percent, our economy is approaching full employment, the output gap is extremely small," Hammond said in response to a question in parliament about increasing borrowing to fund more housing.

(Reporting by David Milliken, writing by William James, editing by Andy Bruce)