Brexit Update: New UK Chancellor Sends Mixed Signals

July 14th, 2016

New UK Chancellor Sends Mixed Signals

Phillip Hammond has been appointed by the new United Kingdom (UK) Prime Minister, Theresa May, to serve as the Chancellor of the Exchequer replacing George Osborne. In his first days on the job, Hammond has sent mixed signals about the state of the economy and the necessity of emergency fiscal and monetary measures. Of course Brexit is at the top of the chancellor’s agenda, but he has said that no emergency crisis budget will be necessary, despite markets being “rattled” since the referendum. Former Chancellor Osborne had warned that a temporary emergency budget with tax hikes and budget cuts would be necessary to combat the effects of Brexit. Instead, Hammond has taken a ‘business as usual’ approach, saying, “we will do an autumn statement in the usual way – in the autumn.”

Hammond has said, however, that some actions will be necessary to maintain stability in the economy. “Our economy will change as we go forward and it will require a different set of parameters,” he said during a recent interview. “The challenge for us is to send signals of assurance as quickly as we can to the international investment community, to British businesses and consumers so we can get those decisions made,” he added.  Hammond confirmed that the UK would have to leave the European single market, but would negotiate terms to access it in sime new capacity. On that note he said, “If there is one thing that is damaging our economy today it is uncertainty … [businesses] want to know on what terms they will be able to sell to the single market.”

Exchange Rates

£1 GBP = $1.33 USD

€1 EUR = $1.11 USD

£1 GBP = €1.20 EUR

(as of 9:30 AM EST, 7/14/2016)

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