Top world economies commit to contain Brexit fallout at G20 finance ministers meeting

Jake Cordell
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Philip Hammond was attending his first G20 finance ministers meeting as chancellor of the exchequer
Philip Hammond was attending his first G20 finance ministers meeting as chancellor of the exchequer (Source: Getty)

World leaders have indicated they stand ready to act to ensure the UK's vote to leave the EU does not upset already-fragile global economic growth.

G20 finance ministers and central bank governors said the world's largest economies "are well positioned to proactively address the potential economic and financial consequences stemming from the UK referendum," at the conclusion of their meeting in the Chinese city of Chengdu, the first official get-together of the group since the 23 June vote.

In a joint statement, the group, which includes the UK's chancellor Philip Hammond and the governor of the Bank of England Mark Carney said: "We are taking actions to foster confidence and support growth. In light of recent developments, we reiterate our determination to use all policy tools - monetary, fiscal and structural - individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth."

Read more: GDP figures to mask Brexit slowdown

Carney, who heads up the Financial Stability Board at the Switzerland-based Bank for International Settlements in addition to his role as Bank of England chief, said the financial system had helped contain the wider economic fallout from the UK's vote to leave the EU.

Hammond also signalled he was preparing for a fiscal policy "reset" in his first Autumn Statement as chancellor, which could mean an extra bout of infrastructure spending or a temporary cut to VAT, similar to that seen during the recession.

Read more: How did the world's media respond to the UK's vote to leave the EU?

The G20 finance ministers also raised yet more concerns about weak global growth, which has consistently undershot expectations and is taking much longer to recover than expected in the wake of the crisis.

The group committed to cooperating, not competing, to stoke growth, and explicitly ruled out exchange rate manipulation and "competitive devaluations" to help support national economies.

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