Osborne backs away from emergency Budget

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Chancellor George Osborne says the UK’s vote to leave the EU will not trigger an immediate emergency Budget.

In a statement today, Osborne says the UK is in a “position of strength” but that there would still be an “adjustment” to the economy.

Osborne says: “It is inevitable, after Thursday’s vote, that Britain’s economy is going to have to adjust to the new situation we find ourselves in.”

The Treasury says it has identified three main Brexit challenges, the first being economic volatility.

Osborne says: “Markets may not have been expecting the referendum result – but the Treasury, the Bank of England, and the FCA have spent the last few months putting in place robust contingency plans for the immediate financial aftermath in the event of this result.

“We and the PRA have worked systematically with each major financial institution in recent weeks to make sure they were ready to deal with the consequences of a vote to leave.”

The second challenge is uncertainty around executing a withdrawal from the EU.

Osborne says the UK has to trigger Article 50 to leave the EU, but says: “In the meantime, and during the negotiations that will follow, there will be no change to people’s rights to travel and work, and to the way our goods and services are traded, or to the way our economy and financial system is regulated.

“However, it is already evident that as a result of Thursday’s decision, some firms are continuing to pause their decisions to invest, or to hire people.

“As I said before the referendum, this will have an impact on the economy and the public finances – and there will need to be action to address that.

“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 Office for Budget Responsibility to assess the economy in the autumn, and for the new Prime Minister to be in place.”

Osborne adds the UK economy is strong and competitive and that the country is “open for business”.

The final challenge is renegotiating trade agreements with Europe.

Osborne says: “Together, my colleagues in the Government, the Conservative party and in Parliament will have to determine what those terms should be – and we’ll have to negotiate with our European friends to agree them.”

The Chancellor’s statement is his first since the Brexit vote on Thursday.

Last week the Bank of England said it had a plan for handling any “volatility” from the EU referendum.