Britain plans fiscal buffer : Hammond

Britain is preparing a “fiscal reserve” to support the economy in case of turmoil when the country officially exits the European Union, finance minister Philip Hammond told Bloomberg TV yesterday. “We are in a period of uncertainty because of the Brexit negotiations,” Hammond said in an interview in Bali, where finance ministers are gathered for meetings of the World Bank and IMF.

“We will keep an appropriate fiscal reserve so that if we need to we can intervene to support demand in the UK economy.” He gave no details on the size of the reserve but said it could be used “to support the spending envelope or to deliver tax cuts, or to pay down the debt more quickly”. Negotiations between Britain and the EU on Brexit have been thrown into crisis again, with a growing government revolt emerging in London ahead of a high-stakes summit in Brussels next week.

British newspapers reported Friday that several ministers were threatening to quit the government over concessions Prime Minister Theresa May is preparing to make in the talks. But Hammond insisted that negotiations were making progress. “There has very definitely been a change of gear over the last 10 days,” he told reporters Friday. “There is clearly a commitment to try to find a way forward.” Britain is scheduled to leave the EU on March 29 next year.