In the wake of the Prime Minister’s announcement that Article 50 will be triggered by the end of March 2017, Sterling fell by almost 1% to a three year low against the Euro on Monday, October 3. It was also down against the US dollar by 1.1%. The Financial Times reported that heavy pressure on the Pound was linked to recent rhetoric that the government could be leaning towards a “hard Brexit” (which would mean the UK leaving the EU’s single market).
Phillip Hammond, Chancellor of the Exchequer, in an interview with the BBC today, has warned people to expect economic turbulence for “a couple of years, or perhaps even longer” whilst the UK navigates the Brexit negotiations. Mr Hammond stressed the importance of agreeing a deal as soon as possible, to return certainty to the UK economy. Veering away from his predecessor’s strategy, Mr Hammond said that, due to the uncertainty of the Brexit vote, the focus would now be on growth, rather than balancing the books by 2020. Later at the Conservative party conference, Mr Hammond restated the Government’s “no ifs, no buts” position but again stressed the importance of safeguarding the economy, jobs and living standards. In supporting this Mr Hammond confirmed that the Treasury would continue payments of any EU grants secured by businesses and organisations before the official break and offered £220m of new funding for tech innovation.