The Chancellor of the Exchequer has warned of “turbulence” once Britain begins its negotiations to leave the European Union.
Speaking to the Conservative Party conference in Birmingham, Philip Hammond said the country’s economic future “must not be defined by Brexit” and that he would do whatever it took to protect the economy from the effects of leaving the EU.
He said: “The independent Bank of England successfully cut interest rates to restore confidence in the wake of the vote.
“But as the economy responds over the coming months fiscal policy may also have a role to play.
“So let me be clear, throughout the negotiating process, we are ready to take whatever steps are necessary to protect this economy from turbulence.
“And when the process is over, we are ready to provide support to British businesses as they adjust to life outside the EU.”
He used his speech to announce that the government will guarantee funding for structural and investment projects in line with the UK’s strategic priorities which will continue after the country has left the EU.
Mr Hammond also put his predecessor’s target of reducing the deficit on hold.
He said: “We should, of course, be proud of our achievements in fiscal consolidation but the work that we began in 2010 is not finished. The deficit remains unsustainable and the decision to leave the EU has introduced new fiscal uncertainty.
“The British people elected us on a promise to restore fiscal discipline and that is exactly what we are going to do but we will do it in a pragmatic way that reflects the new circumstances we face.
“The fiscal policies that George Osborne set out were the right ones for that time but when times change, we must change with them.
“So we will no longer target a surplus at the end of this Parliament but make no mistake, the task of fiscal consolidation must continue.”
Beyond Britain’s negotiations to leave the EU, Mr Hammond also warned of a “dangerous divide” between those who believe they have a stake in the UK economy and those who don’t.
He also said Britain’s low productivity would have to change.
