U.K.’s Economy Headed Into ‘Greater Uncertainty,’ Hammond WarnsBy
Cautious tone comes after better-than-expected growth figures
Treasury wants to be ready for all Brexit-related outcomes
U.K. Chancellor of the Exchequer Philip Hammond warned that Europe’s second-biggest economy could be heading into the unknown as his government negotiates an exit from the European Union and the Treasury prepares to tackle any unexpected economic turns.
Hammond was pleased with official data that showed a more buoyant economy -- it grew by 0.5 percent in the third quarter, 0.2 percentage points more than forecast. Nevertheless, Brexit talks due to start next year could crimp growth.
“We should look at these figures and see an economy that is resilient and strong going into a period which is likely to have greater uncertainty,” Hammond said in an interview with Channel 4 News. “The only sensible thing for me to do is to be prepared for a wide range of outcomes and make sure that we can respond appropriately to whatever path the economy takes over the next 12 to 18 months.”
The latest growth figures defy the government’s pre-referendum rhetoric that casting a vote for Brexit was tantamount to throwing the country into recession. Even so, Britain has yet to even start divorce proceedings with the other 27 EU members, meaning any tangible consequences won’t be felt for a while. Hammond suggested the government may yet be called on to shore up the economy.
“Businesses, markets are waiting to see what the outcome of our negotiations with the European Union will be and I believe we need to be able to support the economy during that period,” Hammond said.