UK Treasury chief: Brexit uncertainty could drag on economy

Britain’s economy could face a slowdown because of the uncertainty caused by the decision to leave the European Union, the government’s finance minister said on Sunday.

In an illustration of the conflicting forces at work, the Conservative government is facing pressure from dozens of its own lawmakers to make a decisive break with the EU, while a major business group insisted today that Britain must retain access to the bloc’s markets and skilled workforce.

“We’re going to have an unprecedented level of uncertainty and that’s one of the factors causing many commentators to predict that there will be a slowing of economic growth,” Chancellor of the Exchequer Philip Hammond said. Hammond, who will unveil the government’s first major spending plans since June’s EU membership referendum in a budget statement on Wednesday, told ITV television “there’s no point crying over” the uncertainty.

“We just have to plan to accommodate it,” he said.

Prime Minister Theresa May’s government has said it plans to trigger two years of formal exit talks with the EU by March 31, but insists it would be foolish to give away its negotiating position before then. The uncertainty has helped fuel economic jitters and driven down the value of the pound, amid claims that the government is deeply divided about how to approach Britain’s EU exit.

This week, the Institute for Government, a non-partisan think tank, said “a lack of clarity” within government “has caused distractions and delayed work on Brexit”.

The EU has long been a divisive issue for the Conservatives, and May is being squeezed between politicians demanding she apply the brakes to Brexit and those who want her to hurry up and make a decisive split.

Some 60 Conservative lawmakers urged May yesterday to take Britain out of the EU’s customs union, which guarantees tariff-free trade within the bloc but imposes levies on goods from outside.