British economy faces Brexit ‘rollercoaster’

Britain’s economy faces “turbulence” as it negotiates its EU exit and consumer and business confidence could go up and down like a “rollercoaster”, finance minister Philip Hammond warned on Monday.

“We must expect some turbulence as we go through this negotiating process,” the chancellor of the Exchequer told the BBC ahead of a keynote speech at the ruling Conservative party’s annual conference.

“There will be a period of a couple of years or perhaps even longer when businesses are uncertain about the final state of our relationship with the European Union,” he said.

Hammond said businesses were delaying investment decisions because of the uncertainty.

“If we don’t intervene to counteract that effect that would have an effect on growth and jobs,” he said.

Hammond said his challenge would be to keep consumer and business confidence stable.

“We have to expect a period when confidence will go up and down — perhaps on a bit of a rollercoaster — until we get to a final agreement,” he said.

Prime Minister Theresa May on Sunday said Britain would trigger Article 50 — the formal procedure for leaving the EU — by the end of March, signalling the start of an expected two-year negotiation process.

Hammond is seen as a proponent of a more gradual “soft Brexit” that would retain access to the EU’s single market, while other “hard Brexit” proponents in May’s cabinet want a clean break with the EU.

Hammond said that in the negotiations Britain would seek “the greatest degree of access for British goods and services… that we can possibly achieve”.

“The key thing is having access without the imposition of tariffs, access without the imposition of quotas,” he said, adding that this would not be a “one-way trade” because EU exporters would also want to continue to have access to the British market.