Osborne: UK economy in a position of strength


Source: BBC

George Osborne has said the UK is ready to face the future “from a position of strength” and indicated there will be no immediate emergency Budget.

The chancellor said there would still be a need to “adjust” the economy, but said it was “perfectly sensible to wait for a new prime minister” such action.

Mr Osborne’s comments, his first public statement since the referendum result, were aimed a calming financial markets.

However, the FTSE 100 and the pound have continued to fall sharply.

Mr Osborne said: “I said we had to fix the roof so we were prepared for whatever the future held and thank goodness we did,” he said.

On the process of the UK’s departure from the EU, he said: “Only the UK can trigger Article 50. 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.”

Despite the comments, the FTSE 100 extended loses in late morning trading, with bank, airline and property shares tumbling.

Meanwhile, sterling hit a 31-year low, and yields on 10-year government bonds sank below 1% for the first time.

The chancellor’s statement came as the repercussions of the Brexit vote continued to shake the UK’s political system.

The opposition Labour party has seen 14 of its senior members resign since shadow foreign secretary Hilary Benn was sacked in the early hours of Sunday after he told Mr Corbyn he had lost confidence in him.

The latest front-bench resignations, on Monday morning, are by shadow foreign minister Diana Johnson, shadow civil society minister Anna Turley and shadow defence minister Toby Perkins.

In response, Labour leader Jeremy Corbyn has announced a reshaped shadow cabinet, but he still faces a potential no-confidence motion from Labour MPs.

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