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UK's challenge to avoid "cliff-edge" Brexit

Tuesday, June 20, 2017 - 01:54

The two key decision-makers in Britain's economy give speeches in London to spell out how they plan to prevent further hits to already weakened growth prospects following the launch of Brexit talks. Ciara Lee reports.

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Avoid a damaging cliff-edge - British finance minister Philip Hammond's plan just a day after formal Brexit negotiations began. He says Britain needs an implementation period when it leaves the single market (SOUNDBITE) (English) BRITISH FINANCE MINISTER PHILIP HAMMOND, SAYING: "So how do we achieve this Brexit it for Britain? Firstly by securing a comprehensive agreement for trade in goods and services. Secondly by negotiating mutually beneficial transitional arrangements." Speaking to an audience packed with banking executives, Hammond took a swipe at moves by the EU to shift some of Britain's financial services to the bloc. SOUNDBITE) (English) BRITISH FINANCE MINISTER PHILIP HAMMOND, SAYING: "Let's be honest we are already hearing protectionist agendas being advanced, disguised as arguments about regulatory competence, financial stability and supervisory oversight." But speaking next, Bank of England Governor Mark Carney said companies might soon start to activate contingency plans. Adding that now is not the time to raise interest rates. (SOUNDBITE) (English) BANK OF ENGLAND GOVERNOR, MARK CARNEY, SAYING: "In the coming months I'd like to see the extent to which weaker consumption growth is offset by other components of demand, where wages begin to firm, and more generally how the economy reacts to the prospect of tighter financial conditions." The BoE is juggling the tricky combination of rising prices. And slowing wage growth as the economy loses much of last year's impetus. (SOUNDBITE) (ENGLISH) CIBC, HEAD OF FX STRATEGY, JEREMY STRETCH, SAYING: "We haven't seen the peak in inflation yet. But without evidence of second round wage effects then I think the bank will be remarkably sanguine about these inflation risks. Carney has just reminded the market of that." Britain's car industry also voicing its concerns says it does not believe the UK will be able to strike a full Brexit deal during the course of two-year talks. In contrast, the Confederation of British Industry has bumped up its forecast for growth this year. But warned growth will be slower in the years ahead as living standards are hit by rising inflation.

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UK's challenge to avoid "cliff-edge" Brexit

Tuesday, June 20, 2017 - 01:54