George Osborne moves to reassure the UK markets

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This morning George Osborne made a statement assuring the UK the government would move to strengthen the economy and that Britain is still open for business…

After a weekend of silence, Chancellor George Osborne has finally made a statement reassuring the nation in the wake of the EU referendum vote.

The chancellor was uncharacteristically quiet over the weekend, prompting speculation over where he was. In his statement, he revealed he had been in discussions with relevant global counterparts, as well as finance ministers in Europe, the International Monetary Fund, central banks, and the US Treasury Secretary. His weekend was undoubtedly a busy one as he moved to shore up the UK’s financial interests.

Mirroring the speech delivered by the governor of the Bank of England Mark Carney on Friday morning, the Chancellor moved to reassure the global community the UK is still open for business. He said the UK was “equipped for whatever happens”. He also said the country is ready to face the future “from a position of strength”.

One of the main concerns Osborne—and the Treasury—had in the lead up to the referendum was the potential of a Brexit vote causing another recession. Journalists asked the chancellor if he still believed this would be on the cards. His answer was a little more caution, stating while he “did not resile” from the predictions made during the campaign, the economy remained strong.

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.” however, he added the “fundamentals” of the British economy are strong.

“I said we had to fix the roof so that we were prepared for whatever the future held. Thank goodness we did.

“As a result, our economy is about as strong as it could be to confront the challenge our country now faces.”

The vote on Thursday, which saw 51 per cent of the country vote to leave the EU, caused the markets to slump Friday morning. Shoring up the UK as a good place to continue to invest in has been the objective of both Carney, who spoke Friday morning, and now the Chancellor.

“It is already evident that as a result of Thursday’s decision some firms are continuing to pause their decisions to invest, or to hire people,” Osborne said.

“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.”

Osborne also expressed agreement with David Cameron’s plans to delay triggering Article 50 of the Lisbon Treaty, which starts the process of EU withdrawal.

“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,” he said.

“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.”

Osborne, who had said in the run up to the referendum that a vote to leave would lead to an immediate emergency budget, was a little more reticent about the matter this morning. He said it would be pertinent to wait until the Office of Budget Responsibility has had chance to assess the economy in the autumn and for the new Prime Minister to be in position before actions are taken.

The Chancellor was firm in stating the result while not the one he wanted would be followed through as the “British people have given us their instructions.”

In a move that will also go some way to alleviate concerns of investors, he also seemed to rule out tendering his resignation, stating he intends “to play an active part” in negotiating an exit from the EU.


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