While post-referendum figures have been grim, the chancellor also discussed the opportunities facing the UK.
Advertisement
Britain’s ruling Conservative party abandoned its policy of reaching a budget surplus by 2020 following the shock Brexit vote, potentially freeing up funds for spending. While Hammond acknowledged there had been “global disappointment” at the decision to quit the European Union, he added: “What we now need to do is get on with it in a way that minimises the economic impact on the United Kingdom economy in the short term and maximises the benefit in the long term”.
Earlier this month, the Chinese state media reported that the Chinese ministry of commerce wants to do a United Kingdom free trade deal.
Mr Hammond has now revealed that Britain is also keen.
It will be the first time that the United Kingdom has embarked on such a major project with China, and could see greater access for major Chinese banks and businesses to the United Kingdom economy.
And will raise concerns about cheap manufactured goods entering the United Kingdom more easily. Beijing is one of the UK’s biggest inward investors.
That would be an important source of export income for Britain.
An ambitious free trade deal between the United Kingdom and China is on the cards.
Speaking on the fringes of the G20 finance ministers’ meeting in Chengdu – his first overseas visit as Chancellor – Mr Hammond acknowledged the decision to leave the European Union would “hang over the world economy” until at least 2018.
“The reality is that there will be a measure of uncertainty right up to the conclusion of our negotiations with the European Union”, Hammond added.
“That’s something we will have to explore in the future”.
The EU’s top economic official, Pierre Moscovici, said the bloc understood that Britain should not be rushed but “at the same time.let’s not waste time, let’s not have too much uncertainty, let’s act and choose as swiftly as possible”.
“We know we can’t legally enter into new trade agreements until the point where we exit the European Union, which could be two, two-and-a-half years down the line”.
As well as a positive reaction from China, Mr Hammond said that he did not believe that the European Union was trying to teach the United Kingdom a lesson over the Brexit vote by making negotiations over trade hard. If you continue to use this site we will assume that you are happy with it.
Mr Hammond’s predecessor in the Treasury, George Osborne, wooed investment from China in recent years, including plans for funding for the proposed HS2 and Hinkley Point C projects.
Mr Hammond said the Chinese, with whose authorities he has been meeting, viewed the referendum result as an opportunity.
Advertisement
The British public have spoken.
