The economic and political fallout from the EU referendum has been nothing short of unprecedented. Not only did the sterling and stock markets take a slump in the immediate aftermath of the vote, but both Labour and the Conservative Party have been thrown into turmoil.
Meanwhile, businesses have been gripped by fear and uncertainty, with a snap survey by the Institute of Directors revealing that one in five of its members are considering moving some of their operations outside the UK.
With the markets now returning to pre-referendum levels, the initial shock seems to have dissipated, but the government is still working hard to restore confidence in the economy. To that end, Chancellor of the Exchequer George Osborne has pledged to cut UK corporation tax to 15%, which will see it boast the lowest current rate of any major economy.
Speaking to the Financial Times, Osborne said the proposal was part of the government’s five-point plan to build a “super competitive economy” and will prove that the country is still “open for business”. The plan also includes a redoubling of efforts to invest in the so-called Northern powerhouse; focusing on a new investment push from China; maintaining the UK’s fiscal credibility and ensuring continued support for bank lending.
It comes a week after Osborne scrapped his target of achieving a budget surplus by 2020, as the Treasury looks to prevent the UK falling back into recession.
In spite of his warnings about the impact of a Brexit on the British economy, the Chancellor told the FT that the country had to accept the result of the EU referendum.
We must focus on the horizon and the journey ahead and make the most of the hand we’ve been dealt
And while Osborne refused to give his backing to any of the candidates in the Conservative leadership race, he said the next Prime Minister should look to retain access to the EU single market, although admitted this could prove difficult given Brexit voters’ calls for tighter immigration controls.
For now, the future still looks uncertain for thousands of SMEs in the country. However, we’d suggest having a read of our Brexit guide before making any rash decisions.
Photo of George Osborne taken by M. Holland (via Creative Commons)