- REUTERS/Toby Melville
- Philip Hammond says a “cloudy of uncertainty” is hanging over the British economy due to Brexit. Chancellor says uncertainty must be removed “as soon as possible” in order to avoid further damage. Hammond warns that a no-deal Brexit could prevent planes from flying in and out of the UK.
LONDON – The British economy is already suffering due to the “cloud of uncertainty” caused by Brexit, Chancellor Philip Hammond said today.
Hammond told the Treasury Select Committee that uncertainty over Brexit negotiations must end soon to prevent any further “dampening” of the UK’s economic prospects.
“While the UK economy is fundamentally strong and in good shape, we are being affected by uncertainty over the negotiation process that we are engaged in at the moment,” he told MPs.
“There’s plenty of anecdotal evidence that business and consumers are waiting to see what the outcome is or at least what the direction of travel is before firming up investment decisions and consumption decisions.”
He added that: “The cloud of uncertainty is acting as a temporary dampener and we need to remove it as soon as possible by making progress with the negotiation process.”
Hammond also warned against a no-deal Brexit saying that it was “possible” that planes would no longer be able to fly in and out of the UK due to air traffic control arrangements coming to an end.
He told MPs that: “It is already conceivable that in a no deal scenario there will be no air traffic moving between the UK and the European Union on the 29th March 2019.”
Flights between the UK and EU are currently managed under the Open Skies agreement, which would cease to apply if Britain leaves without a deal.
While Hammond said such a scenario was possible he added that: “I don’t think anyone seriously believes that is where we will get to.”
The Chancellor has been urged by some Tory MPs to make detailed plans for leaving the EU without a deal. While he said the Treasury was making some plans for all possible scenarios, he was not willing to set aside funds for an extreme exit from the EU until absolutely necessary.
Prime Minister Theresa May is facing calls from Brexit-supporting MPs to sack Hammond for what they claim is his “pessimistic” view of Brexit. In a speech to MPs this week, May said that she would prove the “doomsayers” on Brexit wrong and achieve a good deal for Britain.