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George Osborne seeks to reassure markets with morning statement

Published 26/06/2016

Boris Johnson may now be favourite to become the next prime minister - but Tories who backed Remain in the EU referendum are keen to stop him
Boris Johnson may now be favourite to become the next prime minister - but Tories who backed Remain in the EU referendum are keen to stop him

Chancellor George Osborne is to make an early morning statement aimed at trying to reassure financial markets after the surprise Brexit vote triggered 72 hours of international turmoil.

Mr Osborne, whose failure to speak publicly since the narrow win for the Leave side was announced last Friday drew questions from across the political spectrum, will set out how the Government intends to move forward and "protect the national interest" after its humiliating referendum defeat.

"The Chancellor will make a statement to provide reassurance about financial and economic stability in light of the referendum result and the actions that he and the rest of the Government will be taking to protect the national interest over the coming period," a Treasury spokesman said.

The move follows unprecedented upheaval in both major political parties with outgoing premier David Cameron's resignation plunging the Tories into a battle of succession, as Labour leader Jeremy Corbyn faces down a mass shadow cabinet walk-out aimed at toppling him.

Mr Osborne is to make the statement before the markets open in order to attempt to head-off a repeat of the run on the pound and global stock market plunge which was provoked by the unexpected pro-Brexit vote.

The Chancellor is also under pressure to set out a timeline for opening negotiations with the EU on the terms of Britain's "divorce" from the EU.

Mr Cameron has insisted his successor should be the one to invoke article 50 of the Lisbon Treaty which sets in train formal withdrawal procedures after he leaves Downing Street in October, however, EU leaders are becoming increasing impatient with this proposed delay as they insist the UK has opted to quit and needs to be out of the bloc as soon as possible.

Pro-Brexit leaders had hoped to hold informal talks with the EU before triggering the strict two year time table for exit set out in the Lisbon Treaty, but Brussels is hostile to the idea.

Mr Osborne will also need to clarify whether he will try to bring-in the so-called "punishment Budget" comprising of £30 billion worth of tax rises and spending cuts that he insisted during the referendum campaign would be necessary in the event of the UK voting for Brexit.

Mr Corbyn and pro-Brexit Tory MPs made it clear that they would not vote for such a financial package if Mr Osborne tried to get it through the Commons.

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