As the British economy continues to brace itself against the shock of Brexit, it now has a new challenge on its hands – that of a new leader and cabinet. On July 13, following the official resignation of David Cameron, Theresa May became the 13th Prime Minister of the UK under the reign of Queen Elizabeth II, as well as only the second woman to have held the title.
May’s first order of business was to appoint a new inner circle of high-ranking ministers. Named as Foreign Secretary is controversial character and former Mayor of London, Boris Johnson, while taking over from May’s previous post of Home Secretary is Amber Rudd. David Davis, Cameron’s rival for the Conservative leadership in 2005, has been selected as Secretary of State for Exiting the EU, a newly created role that will see him head Brexit negotiations with the EU.
Replacing George Osborne as the UK’s new Chancellor of the Exchequer is Phillip Hammond, former Foreign Secretary for Cameron between 2014 and 2016.
Swiftly after his appointment, Hammond met with the Bank of England’s policy makers to discuss a reduction of the key interest rate. This move came in a bid to quell the tumult after the British pound plummeted and consumer confidence fell to its lowest rate in over two decades.
Hammond’s decision to refrain from an emergency budget is wise in a landscape with so many developments left to unfold
Hammond has spoken of the necessity of clarifying the new trading relationship between the EU and the UK going forward. He told the BBC: “If there’s one thing that is damaging our economy today, right now, it’s uncertainty for businesses that want to go ahead investing in new equipment and machinery, building new factories, creating new jobs.”
The new Chancellor has also revealed plans to hold off on an emergency budget, instead choosing to “work closely” with the Bank of England in order to prepare the Autumn Statement. After doing so, Hammond will formulate a new economic strategy for the UK in time for the usual budget that takes place in spring.
Giving the circumstances that both May and Hammond find themselves in, stabilisation of the economy is key at this time. This will involve the difficult talk of re-elevating consumer confidence and alleviating the fears of the business community. A great deal of this rests upon the new relationship that is yet to be established between the UK and the EU – a feat that is likely to take some time, given all the new terms and variables that must be agreed.
Hammond’s decision to refrain from an emergency budget is wise in a landscape with so many developments left to unfold. Nonetheless, the British economy finds itself in the most precarious climate it has faced since the 2008 financial crisis – and as seen in recent years, it is unlikely that recovery will be swift.