LONDON - Britain's Treasury chief is warning of turbulence in the coming years as the country negotiates its exit from the European Union.
Philip Hammond told the BBC on Monday that Britain will face a couple of years — or longer — of uncertainty as Britain goes through the process of leaving the 28-nation trading bloc.
"I think we must go into this negotiating period with a realistic expectation of the turbulence that there could be during the negotiations. People will be speculating — one day it's going very well, one day it's not going so well,'' Hammond said. "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.''
In comments made before he addresses the Conservative Party conference, Hammond said the country would continue its austerity program — even as it abandoned the goal of the previous government to put the country's books into surplus by the end of the decade. The policy would allow the government the ability to borrow more to invest in the economy after the Brexit shock.
Hammond's remarks came a day after Prime Minister Theresa May set a timetable for Britain's exit.
The pound has fallen 0.5 percent on the news to $1.2859 as May's comments suggested the country was on track for a so-called "hard Brexit,'' in which Britain loses the possibility of continuing close ties to the bloc.
The remarks are being interpreted this way because May stressed that voters choosing to leave the European Union had clearly wanted curbs on immigration. One of the founding principles of membership in the single market is allowing the free movement of labor.