Skip to Content

Britain’s Finance Minister Is Trying to Reassure Global Markets After Brexit

The U.K. Treasury chief hadn’t spoken publicly about the nation’s stunning decision Thursday to exit the European Union, but he broke his silence Monday in an attempt to quell panic in the global markets.

George Osborne, British chancellor of the Exchequer, said the British economy is “about as strong as it could be to confront the challenge our country now faces,” and he said he’s been in contact with other financial ministers in Europe, the United States’ Treasure secretary, the International Monetary Fund, and central banks to evaluate if markets can handle the Brexit blow.

The British pound slid about 3% Monday morning, though it hovered just above the historic lows it plunged to on Friday.

 

Britain faces a “new situation” that it must adjust to, Osborne said. But he did not announce any action on that front on Monday, noting that he did not have a mandate to change tax or public spending policy immediately

“There will have to be action to deal with the impact on the public finances, but of course it’s perfectly sensible to wait until we have a new prime minister to determine what that will look like,” he said.

U.K. Prime Minister David Cameron resigned Friday in the wake of the Brexit vote. His replacement is expected by October.

Osborne on Monday did not rebuff forecasts of a U.K. recession due to its decision to cut ties with the EU, adding that some firms had already put plans for investment in the U.K. on hold. The volatility the market has experienced since the vote, he said, is “likely to continue.”

Prior to the Brexit decision, Osborne, a Conservative, had been considered a potential successor to Cameron as party leader and, subsequently, prime minister. But his talk prior to Thursday’s vote of an “emergency budget” in the event of the Leave win prompted intense backlash from members of his own party, some of whom considered the proposal for spending cuts and tax increases a deliberate attempt to alarm the markets.

Osborne did not comment on his political future Monday.

Reuters contributed to this story.