Published: Sun, July 17, 2016
Economy | By Melissa Porter

Britain's Chancellor Hammond says no need for emergency budget

Britain's Chancellor Hammond says no need for emergency budget

Earlier Thursday, the newly-appointed Chancellor Philip Hammond ruled out an emergency budget, which his predecessor Osborne had said would nearly certainly be needed in the event of a vote to leave the EU.

This time past year George Osborne was the favourite to succeed his friend David Cameron as Prime Minister.

As Finance Minister, Mr Hammond will have to manage an economy that risks sliding into recession after last month's vote to leave the European Union, and set new budget goals after Mr Osborne abandoned his aim to run a budget surplus by 2020.

In a series of media interviews on Thursday, Hammond declined to commit himself to plans made by Osborne in the wake of the referendum, including proposals to make further cuts to corporation tax.

While the selection of pro-Brexit campaign leader Boris Johnson as foreign minister dismayed some, Mr Hammond was seen as a good choice as chancellor of the exchequer.

Hammond acknowledged that the Brexit vote has had "a chilling effect" on investment, saying "the No. 1 challenge is to stabilize the economy, send signals of confidence about the future".

"But now we are entering a new phase in the story of the British economy with the decision to leave the European Union, our economy will change as we go forward in the future and it will require a different set of parameters".

Hammond has been serving as foreign secretary in David Cameron's government and is no stranger to the finance sector.

"The question is how we negotiate with the European Union, not from the point of view of being members of it but from the point of view of being close neighbours and trade partners of it", he said. He said he'd deliver an autumn statement "in the normal way".

The bank could also re-start the so-called quantitative easing program under which it effectively pumps money into the economy via the purchase of government bonds from financial institutions.

He said he hoped to work with him over the summer and reassured companies that the Government would take a "pragmatic approach" to Brexit that would "protect the British economy".

Mr Hammond will today meet with Bank of England Governor Mark Carney and other senior figures to assess the state of the British economy.

Following his appointment yesterday (13 July) morning by new Prime Minister Theresa May, Hammond remained composed while giving his answers regarding the newly formed cabinet.

The new Education Secretary Justine Greening is a rare breed indeed- An Education Secretary who attended a non-selective state school.

Mr Hammond said the Brexit vote had surprised the markets and business.

Johnson, London's popular former mayor, helped the "leave" campaign win last month's referendum.

Hammond replaces Osborne, a onetime frontrunner to succeed Cameron who staked his reputation on slashing a budget deficit that had swelled to more than 10 percent of economic output by 2010 after the financial crisis.

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