UK's economy is strong enough 'to adjust to the new situation' post Brexit: George Osborne

Seeking to calm turbulent markets post Brexit, Finance Minister George Osborne on Monday said the UK's economy is in a strong position to confront the new challenges but it would have to 'adjust to the new situation'.

PTI June 27, 2016 16:39:59 IST
UK's economy is strong enough 'to adjust to the new situation' post Brexit: George Osborne

London: Seeking to calm turbulent markets post Brexit, Finance Minister George Osborne on Monday said the UK's economy is in a strong position to confront the new challenges but it would have to "adjust to the new situation".

UKs economy is strong enough to adjust to the new situation post Brexit George Osborne

File image of George Osborne. Reuters

Breaking his silence, Osborne who had campaigned strongly for Britain to Remain within the European Union and repeatedly warned against adverse financial consequences of Brexit, sought to reassure the country in the wake of the referendum which resulted in Britain's exit from the EU last week.

"As I said before the referendum, this will have an impact on the economy and the public finances – and there will need to be action to address that," he said. "It is inevitable, after Thursday's vote, that Britain’s economy is going to have to adjust to the new situation we find ourselves in...our economy is about as strong as it could be to confront the challenge our country now faces," he stressed.

On the process of the UK's departure from the EU, he said it was "perfectly sensible to wait for a new prime minister". He said: "Only the UK can trigger Article 50 (of the Lisbon Treaty to exit the EU). And in my judgement, we should only do that when there is a clear view about what new arrangements we are seeking with our European neighbours.

"In the meantime, during the negotiations that will follow, there will be no change to people's rights to travel and work and to the way our goods and services are traded or to the way our economy and financial system is regulated."

Prime Minister David Cameron has announced his decision to step down in the course of the next three months, for a new British Premier to take Brexit negotiations forward. Osborne's statement came shortly before the UK stock market opened yesterday morning in an attempt to reassure investors, telling them that the Treasury and the Bank of England had "further well-thought-through contingency plans if they are needed".

He also indicated that an emergency Budget, dubbed as a "punishment budget" by the Vote Leave camp during the referendum campaign, is also unlikely for the time-being. British businesses have already warned that Brexit would trigger investment cuts and hiring freezes.

A survey by the Institute of Directors (IoD) today found that the majority of businesses believed Brexit was bad for them and a quarter of its members polled in the survey were putting hiring plans on hold, while 5 per cent said they were set to make workers redundant.

Nearly two-thirds of those polled said the outcome of the referendum was negative for their business. Meanwhile, he chairs an emergency Cabinet meeting at Downing Street today, while US secretary of state John Kerry visits London and Brussels for talks on the fallout from the vote.

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