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Roundup: Markets remain volatile despite British chancellor bid to calm nerves

Xinhua, June 27, 2016 Adjust font size:

Financial markets remained volatile Monday despite a speech by Chancellor of the Exchequer George Osborne aimed at reassuring British people and the global community following the EU referendum result.

The British pound plunged to a 31-year low against the dollar with some share trading temporarily halted, while yields on 10-year British government bonds sank for the first time below 1 percent.

Among the hardest hit in the city in Monday morning trading were banks and airlines. Some of the hardest hit banks suffering the sharpest falls caused a momentary halt in some share dealings as automatic circuit breakers kicked in. The benchmark FTSE 100 was down 1.3 percent in late morning trading, reaching 6,059.83 points.

Reactions in currency markets, the banks and the city came after Osborne, making his first reaction since the vote to leave the EU, attempted to calm nerves.

It also came as trouble mounted for Jeremy Corbyn, leader of the main opposition Labour Party.

Facing a vote of no-confidence Monday night when Labour MPs meet at Westminster, Corbyn faced another raft of resignations Monday from his shadow cabinet, with many of his most experienced shadow cabinet ministers quitting.

It prompted one national newspaper today to carry the headline, "The lights are on but nobody is at home."

In his message from the Treasury in London, Osborne said: "Britain is ready to confront what the future holds for us from a position of strength."

Remain supporter Osborne added: "The people have spoken and we must all accept that result and deliver on their instructions. I fully accept the result of the referendum and will do everything I can to make it work for Britain."

It is inevitable the British economy is going to have to adjust to the new situation, he added, saying "you should not underestimate our resolve. We were prepared for the unexpected."

He said markets may not have been expecting the referendum result, but the Treasury, the Bank of England, and the Financial Conduct Authority have spent months putting in place robust contingency plans.

Osborne said he intends to play an active part in the upcoming post-Brexit debate, while on the opposition benches, Corbyn said if Labour MPs force a leadership contest he will put himself forward as a contender. Endit