New Chancellor Philip Hammond rules out emergency Budget

Philip Hammond

The Chancellor, appointed by new prime minister Theresa May yesterday, said he would monitor the economic situation over the summer before setting out spending targets as normal in the autumn statement, reports The Telegraph.

“There’s a lot of work now to do,” Mr Hammond told Sky News. “The prime minister made clear we will do an autumn statement in the usual way in the autumn and we’ll look carefully over the summer at the situation.”

Mr Hammond, previously foreign secretary, admitted the economy had suffered a “shock”, with the immediate impact coming from “businesses pausing investment decisions”.

The Chancellor will meet Mark Carney, the Governor of the Bank of England, this morning for initial discussions on the economy. He praised Mr Carney for doing “an excellent job”, ahead of the Bank’s imminent announcement on interest rates.

Mr Carney is to due to announce at midday whether the Bank will hold interest rates at their record low of 0.5pc, or cut them further, as some commentators have suggested, in order to stimulate the British economy in the wake of the shock decision to leave the EU.

In a series of media appearances to mark the beginning of his tenure at the Treasury, Mr Hammond also scotched the suggestion that Brexit negotiations could take up to six years, saying that Britain needed to conclude a deal “as soon as possible”, and said he could not see Scotland having “a different relationship with the EU” than the rest of the UK.

The Chancellor said the new Cabinet had not made any decisions about changing UK tax laws. In the wake of the referendum result, Mr Hammond’s predecessor, George Osborne, who was sacked by Ms May yesterday after six years as Chancellor, suggested the UK could cut corporate tax to 15 per cent in a bid to attract businesses to Britain once it leaves the EU.

Mr Osborne also said during the referendum campaign that Britain would need an emergency Budget in the event of a vote for Brexit. The so-called “punishment Budget” would have imposed spending cuts and tax rises, and was attacked by Mr Osborne’s critics on the Leave side of the debate as an attempt to scare voters into opting for Remain.

The Chancellor said: “I’m going to sit down with the key figures in the UK economy, like the governor of the Bank of England, look at the situation we face, look at the projections forward and make some carefully considered decisions over the summer.

“Markets do need signals of reassurance, they need to know that we will do whatever is necessary to keep the economy on track,” he told ITV News.

Mr Hammond also signalled that he would consider slowing the pace at which Britain cuts its deficit. Ending the UK’s budget deficit was a key goal of Mr Osborne, who in his last Budget was forced to revise his target date to 2020, based on new assumptions about Britain’s economic growth.