Osborne: Banks Will Help Smooth Market Volatility

Chancellor George Osborne has said that "Britain’s financial system will help our country deal with any Brexit shocks and dampen them – not make them worse"

Emma Wall 27 June, 2016 | 8:55AM
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Chancellor George Osborne’s pledge this morning to protect stock markets from volatility has been an instant success – with the FTSE 100 opening just 0.7% down on Monday morning, compared to the predictions of 3%.

In his first speech since it was revealed on Friday that Britain had voted to leave the European Union, Osborne said that although volatility was to be expected, he would be working with the Treasury, the Bank of England, the Financial Conduct Authority and the country’s major financial institutions to help quell any fallout.

“In the last 72 hours I have been in contact with fellow European finance ministers, central bank governors, the managing director of the IMF, the US Treasury Secretary and the Speaker of Congress, and the CEOs of some of our major financial institutions so that collectively we keep a close eye on developments,” he said.

Osborne admitted it would “not be plain sailing in the days ahead” but said that the mistakes of eight years ago when Britain’s banks caused and contributed to the global financial crisis, “Britain’s financial system will help our country deal with any shocks and dampen them – not contribute to those shocks or make them worse”.

No Change to Travel and Work – for Now

Osborne reiterated the Prime Minister David Cameron’s message that the Government would be waiting until a new leader was in place and trade negotiations with the remaining members of the EU had been started before triggering Article 50 – the policy which makes the Brexit vote a reality.

“Given the delay in triggering Article 50 and the Prime Minister’s decision to hand over to a successor, it is sensible that decisions on what that action should consist of should wait for the OBR to assess the economy in the autumn, and for the new Prime Minister to be in place,” he said.

In the meantime, it would be business as usual for Britons, with travel and working arrangements with the EU continuing as before.

Osborne stressed that the UK economy was robust and that the Government was committed to doing their best for Britain during the transition.

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About Author

Emma Wall  is former Senior International Editor for Morningstar