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Osborne in bid to calm markets in wake of Brexit

Osborne will attempt to calm financial markets in the wake of the Brexit vote by providing reassurances.

Published: 27th June 2016 09:59 AM  |   Last Updated: 27th June 2016 09:59 AM   |  A+A-

Britain EU Referendum_Rich

Speaking during the visit to the south coast, the Chancellor of the Exchequer, George Osborne accused "Brexit" campaigners of being "dishonest" by pretending that the economy would not suffer if those wishing to leave triumphed in the EU referendum. |

LONDON: George Osborne will today (Monday) attempt to calm financial markets in the wake of the Brexit vote by providing reassurances about the UK's financial and economic stability.

In a 7am statement, the Chancellor is expected to lay out a series of new measures to "protect the national interest" in the coming months, as the Treasury seeks to avert another day of economic chaos following the result of the European Union referendum.

Although there has been growing speculation about his position, Government sources last night insisted that the Chancellor has no intention of resigning.

Global stock markets are braced for another tumultuous day, with heavy falls expected on the FTSE 100 despite the late recovery it staged on Friday.

Financial spreadbetters were last night predicting a 2pc fall in the FTSE 100 on Monday morning to 6,019, a move that would wipe pounds 35bn off the value of Britain's biggest companies, as well as falls on European markets. Sterling dropped 1.3pc to $1.3509 in early trading in Tokyo.

It comes as some of the UK's most prominent business leaders urged the country to seize the opportunities of a post-Brexit world, while urging their peers and politicians to "not panic and be pragmatic".

The chief executive of Next, Lord Wolfson of Aspley Guise, has stressed that Britain's success following a withdrawal from the EU will depend upon the tone of trade negotiations.

"If we aim for an open, tolerant and globally ambitious free trading nation, then we have a chance to build a thriving economy. Just setting that goal will encourage confidence and investment in the UK. However, if we pull up the drawbridge and seek to protect our way to prosperity, then we will fail," Lord Wolfson said.

The Tory peer and boss of the pounds 6.3bn high street chain said that "leaving the EU doesn't have to mean isolation, it could actually mean the opposite but it depends on our tone and objectives. Europe is just one piece of the jigsaw. We can redefine our trade relationships with China, India, the Commonwealth and other global economies."

Peter Hargreaves, one of Britain's most successful businessmen and co-founder of stockbroker Hargreaves Lansdown, said that the vote to leave the EU had "created a golden opportunity". The fall in the value of sterling would create a more competitive market as the UK would attract more international investment, he said.

The pound suffered a record one-day loss on Friday, after the referendum result was declared, pushing it to the lowest level since 1985. Sterling tumbled by 8.1pc to $1.3679, almost double the 4.1pc slump on Black Wednesday in 1992 when the UK was forced out of Europe's exchange rate mechanism.

Mr Hargreaves said: "The last time the pound fell like this in 1992, all the economists and politicians preached doom and gloom, but Britain boomed and it became one of the most promising economies in the world. "Almost every country in the world is trying to devalue its currency and Brexit did it for us at a stroke. A cheaper pound will do wonders for our tourism industry - the hotels and budget airlines must be licking their lips", he added.

Jon Moulton, the founder and managing partner of turnaround firm Better Capital, also argued that there was a much bigger opportunity for businesses to trade with non-EU countries such as Australia, New Zealand and Canada.

"The opportunities in Europe will look more or less the same depending on the negotiations. A trade war would hurt Europe much more than us because we import more than we export," he said.

Tim Martin, the founder of pub chain Wetherspoons, said an end to common external tariffs would bring an economic boost. "Around 95pc of our wine comes from outside the EU, such as New Zealand and Australia, and if we remove these tariffs and EU-led restrictions, it will have an immediate benefit. It will also mean the price of wine will go down. Mr Martin was one of 300 business leaders who publicly backed leaving the EU in a letter published last month that argued that the UK's competitiveness is being undermined by membership of a failing EU.

The Leave campaign was also heavily supported by small and medium-sized business leaders who repeatedly argued that the Remain campaign acted in favour only of big companies.

The business leaders The Daily Telegraph spoke to this weekend agreed that London, which voted resoundingly to remain within the EU, stood to benefit from the decision to leave as the City would free itself from red tape imposed by Brussels. "The opportunity to have a different regulatory system will hand us a competitive advantage as we can make our own sensible rules far quicker," said Mr Moulton.

Former HSBC boss Michael Geoghegan said that freeing London "from the shackles of the EU" would strengthen the City's competitive edge against New York.

John Timpson, the founder and owner of shoe repair chain Timpsons, said that it was "now up to companies to spot the opportunities that will give them an advantage. These will be the companies that succeed. It is important to not panic and be pragmatic.

Business leaders are also urging the Government to "take a breath" before triggering Article 50 - the mechanism which starts a countdown for EU exit.

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