World

Treasury chief says UK wants economy 'anchored' in Europe

Britain's Treasury chief told a German audience on Tuesday that his country wants to keep its economy "anchored" in the European mainstream as it leaves the European Union. He called for an early deal on transitional arrangements.

Chancellor of the Exchequer Philip Hammond told a conference organized by a group linked to Chancellor Angela Merkel's party that Britons "voted to regain control of our borders, not to shut down the flow of people that are the lifeblood of our economy, but to be able to manage it."

But Hammond also warned that with Britain accounting for about 16 percent of the EU's gross domestic product, "the risk of a bad outcome that does not promote jobs, growth and prosperity is a real one, not just for the U.K. economy but for the EU economy."

Formal negotiations on Brexit started last week, with Britain's EU departure expected in March 2019.

Britain's government has faced pressure to soften its Brexit stance after Prime Minister Theresa May's party lost its parliamentary majority in an early election this month. Hammond has since emphasized the need to protect economic growth.

"Our economy is firmly in the European mainstream, and it is our ardent wish to be able to keep it anchored there," Hammond said at the Economic Council of the CDU conference.

He called for "early agreements on ... transitional arrangements so that trade between our countries can carry on flowing smoothly," but didn't give a specific timeframe.

He said there was a need to avoid "a disruptive and dangerous cliff edge" and warned of the risk if "somehow we allow petty politics to interfere with economic logic."