Market fails to respond as Osborne tries to play down economic fears
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BRITAIN’S finance minister yesterday tried to play down economic fears over its vote to leave the European Union and said the country would not be rushed to the exit door. Germany and the United States also appealed for calm.
George Osborne said Britain’s economy was “as strong as could be” and that the country was “open for business” after last week’s seismic referendum.
“I want to reassure the British people, and the global community, that Britain is ready to confront what the future holds for us from a position of strength,” he said in his first public comments since the vote.
Despite his words, stocks in London fell by more than 2 percent and the pound crumbled to another three-decade low against the dollar.
Shares in banks, airlines and property companies were particularly hard hit as investors singled out those sectors as being the most vulnerable.
Underscoring the sense of uncertainty, a new survey yesterday showed that a fifth of British business leaders are considering moving operations abroad and that one in four planned to freeze recruitment.
Osborne also stressed that only Britain could trigger Article 50, the section of the EU’s Lisbon Treaty that sets out a two-year timeframe for leaving.
“In my judgment, we should only do that when there is a clear view about what new arrangement we are seeking with our European neighbors,” he said.
Prime Minister David Cameron held a Cabinet meeting to set up a new government unit to embark on the task of ending Britain’s 43-year membership, which would make it the first country to leave the club.
But Cameron, who announced his intention to resign after the results were known on Friday, has said he wants his successor to begin the Brexit negotiations.
European leaders have instead called for Britain to hurry up and end a damaging wave of uncertainty sweeping Europe.
The Conservative Party recommended yesterday that his replacement as party chief and prime minister be installed by September 2 at the latest, with nominations for the post formally closing on Thursday.
Top Brexit campaigner and ex-mayor of London Boris Johnson and Home Secretary Theresa May, who wanted Britain to stay in the European Union but is seen as a unifying candidate, are seen as the favorites.
In his regular column for the Daily Telegraph, Johnson sought to strike a conciliatory tone. “I cannot stress too much that Britain is part of Europe, and always will be,” he wrote.
He also attempted to reach out to the 48 percent of Britons who voted to stay in the EU, urging Brexit supporters to “build bridges” with pro-EU “neighbors, brothers and sisters.”
Italian Prime Minister Matteo Renzi told the Italian Senate: “The last thing Europe needs is to start a yearlong discussion on procedures.”
But US Secretary of State John Kerry, who was due to meet Cameron in London later yesterday, urged EU members not to “lose their head” over the referendum.
“I think it is absolutely essential that we stay focused on how, in this transitional period, nobody loses their head, nobody goes off half cocked, people don’t start ginning up scatterbrained or revengeful premises,” he said before heading to London.
German Chancellor Angela Merkel, leader of Europe’s largest economy, said: “We cannot afford to have a long period of uncertainty. I think that would not be good for either the EU’s 27 member states or Britain,” she said. “But I also understand that Britain needs a certain period of time to analyze the situation.”
Britain’s decision to leave the 28-nation bloc has sent shockwaves through the political and economic fabric of the nation.
It has also fueled fears of a break-up of the United Kingdom with Scotland eying a new independence poll, and created turmoil in the opposition Labour party where leader Jeremy Corbyn is battling an all-out revolt.
Cameron’s spokeswoman played down the announcement by Scottish First Minister Nicola Sturgeon that a second independence referendum was now “on the table” despite a 2014 defeat.
“The reasons for Scotland to be in the UK are as strong now as they were 18 months ago,” the spokeswoman said.
Meanwhile, more than half the shadow Cabinet resigned in protest at Corbyn’s leadership, blaming him for failing to persuade Labour voters to back staying in the EU.
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