In response to the United Kingdom government's move to set out its plans for a "no deal" option, the European Council President said the EU was hopeful it could move to the second stage of talks - which will allow negotiators to talk trade and transition - before the critical end-of-year deadline.
He warned that Brexit was "not a game" after the Prime Minister told the European Union the "ball is in their court".
Hammond will not commit billions of pounds in next month's budget to plan for a hard Brexit, the newspaper said.
He says uncertainty about Brexit is weighing on the economy, and "we need to remove it as soon as possible by making progress".
She also outlined proposals for new laws to set tariffs and quotas - including options if Britain ends the talks with no agreement in place. Donald Tusk, who is the principal representative for the European Union, said the bloc is not working toward a "no deal" outcome for the United Kingdom.
Negotiators are holding a fifth round of talks this week on divorce proceedings, centered on the rights of citizens in each other's nations once the breakup is complete, the border between Ireland and the United Kingdom and the financial commitments Britain will have to pay. The EU does not want to start such negotiations until London and Brussels agree on the terms of the "divorce". "We hear from London that the United Kingdom government is preparing for a "no deal" scenario".
But this week's four-day talks have got off to a slow start, with Barnier and his British counterpart David meeting only on the second day of negotiations, where they would normally meet on the first.
"We have some very strong things going for us, a strong outlook for the future", Hammond told lawmakers.
But asked as he walked away if the ball was now in the EU's court, the Frenchman spun round and wagged his finger at a BBC reporter, saying: "Brexit is not a game".
European Commission spokesman Margaritis Schinas said: "Our teams are available 24/7 and the timing of talks depends on the availability of our United Kingdom partners".
"Further "technical talks" among officials were scheduled for Wednesday, as British officials rejected suggestions that they had not been available to negotiate".