The Government’s lack of clarity over how it wants post-Brexit Britain to look is causing the pound to tank, Ken Clarke has warned.
The former Conservative cabinet minister said it had become clear that “nobody has the faintest idea” what the UK’s future relationship with the EU will look like and that currency traders were reacting to the uncertainty by dumping sterling.
The pound fell to new lows of $1.23 this week, down from a recent high of $1.58 last year. Tourists at airports across the UK are now getting less than one euro for every pound they exchange.
The price of a beer in a New York City bar has soared for British tourists from an average of £3.96 to £5.20 since Brexit, with similar price rises for UK holidaymakers across Europe and the rest of the world.
The Prime Minister Theresa May and Brexit Secretary David Davis have been tight-lipped on how they want Brexit to actually look, leaving uncertainty over issues such as single market membership and freedom of movement.
They have also ruled out giving what they call a “running commentary” on negotiations – suggesting that Parliament will not be given details about the Government’s plan.
“I don’t take too much notice of short-term market movements. The reason the pound keeps zooming south is because nobody has the faintest idea of what we’re going to put in place – and are we going to retain access to the European market where almost half of our exports go at the moment?” Mr Clarke said.
The former Home Secretary rounded on International Trade Secretary Liam Fox, who he said had taken a contradictory approach on the issue he was responsible for.
What experts have said about Brexit
What experts have said about Brexit
1/11 Chancellor of the Exchequer Philip Hammond
The Chancellor claims London can still be a world financial hub despite Brexit “One of Britain’s great strengths is the ability to offer and aggregate all of the services the global financial services industry needs” “This has not changed as a result of the EU referendum and I will do everything I can to ensure the City of London retains its position as the world’s leading international financial centre.”
2/11 Yanis Varoufakis
Greece's former finance minister compared the UK relations with the EU bloc with a well-known song by the Eagles: “You can check out any time you like, as the Hotel California song says, but you can't really leave. The proof is Theresa May has not even dared to trigger Article 50. It's like Harrison Ford going into Indiana Jones' castle and the path behind him fragmenting. You can get in, but getting out is not at all clear”
3/11 Michael O’Leary
Ryanair boss says UK will be ‘screwed’ by EU in Brexit trade deals: “I have no faith in the politicians in London going on about how ‘the world will want to trade with us’. The world will want to screw you – that's what happens in trade talks,” he said. “They have no interest in giving the UK a deal on trade”
4/11 Tim Martin
JD Wetherspoon's chairman has said claims that the UK would see serious economic consequences from a Brexit vote were "lurid" and wrong: “We were told it would be Armageddon from the OECD, from the IMF, David Cameron, the chancellor and President Obama who were predicting locusts in the fields and tidal waves in the North Sea"
5/11 Mark Carney
Governor of Bank of England is 'serene' about Bank of England's Brexit stance: “I am absolutely serene about the … judgments made both by the MPC and the FPC”
6/11 Christine Lagarde
IMF chief urges quick Brexit to reduce economic uncertainty: “We want to see clarity sooner rather than later because we think that a lack of clarity feeds uncertainty, which itself undermines investment appetites and decision making”
7/11 Inga Beale
Lloyd’s chief executive says Brexit is a major issue: "Clearly the UK's referendum on its EU membership is a major issue for us to deal with and we are now focusing our attention on having in place the plans that will ensure Lloyd's continues trading across Europe”
8/11 Colm Kelleher
President of US bank Morgan Stanley says City of London ‘will suffer’ as result of the EU referendum: “I do believe, and I said prior to the referendum, that the City of London will suffer as result of Brexit. The issue is how much”
9/11 Richard Branson
Virgin founder believes we've lost a THIRD of our value because of Brexit and cancelled a deal worth 3,000 jobs: We're not any worse than anybody else, but I suspect we've lost a third of our value which is dreadful for people in the workplace.' He continued: "We were about to do a very big deal, we cancelled that deal, that would have involved 3,000 jobs, and that’s happening all over the country"
10/11 Barack Obama
US President believes Britain was wrong to vote to leave the EU: "It is absolutely true that I believed pre-Brexit vote and continue to believe post-Brexit vote that the world benefited enormously from the United Kingdom's participation in the EU. We are fully supportive of a process that is as little disruptive as possible so that people around the world can continue to benefit from economic growth"
11/11 Kristin Forbes
American economist and an external member of the Monetary Policy Committee of the Bank of England argues that the economy had been “less stormy than many expected” following the shock referendum result: “For now…the economy is experiencing some chop, but no tsunami. The adverse winds could quickly pick up – and merit a stronger policy response. But recently they have shifted to a more favourable direction”
“You can’t make great speeches saying how marvellous free trade is, as Liam Fox does, and then say actually we’re pulling out of the single market,” he said.
“Nor can you say that was decided by the referendum because I don’t think during the referendum campaign nobody addressed this rather esoteric subject of what exactly our trading relationships would be.”
Mr Clarke is a committed pro-European and campaigned strongly for Britain to stay in the bloc. He added that the Chancellor Philip Hammond has “got a real job on his hands”.Reuse content