In his first media appearance as the new Chancellor of the Exchequer, Philip Hammond has effectively ruled out an ‘emergency Budget’ following the Brexit vote.
However, he did hint at a possible change in the direction of the Government’s fiscal policy, suggesting that the Autumn Statement later this year could contain significant measures.
Mr Hammond told Sky News: ‘There’s a lot of work now to do. The Prime Minister made clear we will do an Autumn Statement in the usual way in the autumn and we’ll look carefully over the summer at the situation.’
Without stating specific details, Mr Hammond suggested that the pace at which Britain cuts its deficit could be slowed, and that meeting George Osborne’s target of a surplus by the end of 2020 was no longer a priority.
He said: ‘Of course we’ve got to reduce the deficit further but looking at how and when and at what pace we do that, and how we measure our progress in doing that, is something that we now need to consider in the light of the new circumstances that the economy is facing.’
Mr Hammond admitted that the economy had suffered a ‘shock’ immediately after the referendum vote, due to ‘businesses pausing investment decisions’, but insisted that the Conservative Party’s swift action in installing a new Cabinet team would stabilise the country.
He told ITV News: ‘Now we’ve got the new Government in place, the new team in place, and people can see that we’re working together across that referendum divide in the party to deliver the best possible deal for Britain, I think confidence will gradually begin to return and people will start to see the shape of the future we’re mapping out.’
The new Prime Minister Theresa May has already suggested that George Osborne’s fiscal targets were no longer relevant. In a speech launching her bid to become Prime Minister, she had said: ‘We should no longer seek to reach a budget surplus by the end of the Parliament.’