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Brexit is putting a ‘cloud of uncertainty’ over UK economy, says finance minister

  • The "cloud of uncertainty over current negotiations is acting as a temporary dampener."
  • Media reports suggest that the British government is preparing for a "no deal" scenario, but Hammond told lawmakers that this is not the moment to make such contingency plans
Stefan Rousseau - WPA Pool | Getty Images | Getty Images News

The negotiations to leave the European Union are hurting the British economy by putting it under a "cloud of uncertainty," the U.K.'s finance minister said in parliament on Wednesday.

The U.K. "is fundamentally robust" and there are "some very positive things going on, with a strong outlook for the future," Philip Hammond said. But he added that the "cloud of uncertainty over current negotiations is acting as a temporary dampener."

Negotiating teams are currently on their fifth round of talks but six months of work hasn't yet produced enough progress on three key issues — the exit bill, citizens' rights and the Irish border. The clear lack of agreement is delaying negotiations, which were predicted to have moved on to trade issues this month. The delay raises uncertainty for businesses and citizens, who cannot prepare fully for Brexit. It also raises questions on whether the U.K. and the EU will ever reach an agreement.

Media reports suggest that the British government is preparing for a "no deal" scenario, but Hammond told lawmakers that this is not the moment to make such contingency plans.

"I don't believe we should be making potentially nugatory spending until we need to do so," he said.

However, he added that £250 million ($330 million) has already been given to several departments to prepare for a "hard Brexit" scenario, which would mean no access to the EU's single market — an area where goods and people can move freely.