British Chancellor of the Exchequer Philip Hammond yesterday ruled out an emergency budget in response to economic turbulence triggered by the country’s vote in favor of exiting the EU.
Hammond told media that a budget would be submitted toward the end of the year as planned by his predecessor, George Osborne, following a U-turn.
Ahead of last month’s referendum on Britain’s EU membership, then-chancellor Osborne had suggested that an emergency budget would be required in the event of a Brexit vote.
Photo: AFP
However, he later ruled out such an event, despite the country voting to quit the bloc.
British Prime Minister Theresa May on Wednesday appointed Hammond to replace Osborne.
Osborne was the architect of the past six years of British austerity and a close friend of former British prime minister David Cameron, who stepped down on Wednesday, while both had campaigned for Britain to remain in the EU.
Hammond yesterday told various media outlets that there would be no emergency budget.
“The prime minister made clear we will do an Autumn Statement [budget] in the usual way — in the autumn — and we will look carefully over the summer at the situation,” Hammond told Sky News.
Speaking to ITV, he said that financial markets “need to know we will do whatever is necessary to keep the economy on track.”
Hammond added that he was to meet with Bank of England governor Mark Carney yesterday to assess Britain’s economic situation.
It comes as the Bank of England prepares to announce whether it will cut its main interest rate to a new record low level of less than 0.5 percent to curb the economic fallout from Brexit.
Thirty of 54 economists asked by Bloomberg predicted a reduction, with the majority of those seeing a cut to a record-low 0.25 percent.
A lack of data on the outlook means 24 of those surveyed saw no change this month.
A rate cut would be the bank’s first in seven years.
Since the referendum result, the British pound slumped to a 31-year-low against the US dollar, although it has rebounded slightly.
While a weak pound helps exporters, it makes imports more expensive, which in turn can push up inflation.
A cut to the central bank’s interest rate might help to boost economic growth, but risks further weakening the pound analysts said.
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