Brexit increases 'global economic uncertainty' say G20 finance chiefs

Britain's vote to leave the EU has increased risks for the world economy say finance chiefs at the G20 summit in China. Philip Hammond, the UK's Chancellor of the Exchequer, said the subject had frequently been raised during the talks. "The reality is there will be a measure of uncertainty continuing right up to the conclusion of our negotiations with the EU," he said in a BBC report.

The meeting of bankers and finance ministers from the Group of 20 (G20) major economies round the world met in Chengdu, the first time since the Brexit vote. A statement issued by the G20 ministers said Brexit had added to unpredictability in the global economy where growth was "weaker than desirable". Hammond was grilled over how quickly Britain would start formal negotiations to leave the EU.

"What will start to reduce uncertainty is when we are able to set out more clearly the kind of arrangement we envisage going forward with the European Union," the chancellor said according to Reuters.

"If our European Union partners respond to such a vision positively – obviously it will be subject to negotiation – so that there is a sense perhaps later this year that we are all on the same page in terms of where we expect to be going.

"I think that will send a reassuring signal to the business community and to markets," he said.

The G20 group said it would work to lessen the potential financial and economic repercussions from the Brexit vote. Jens Weidmann, president of Deutsche Bundesbank, Germany's central bank, said there were no indications so far that Europe's economic development was overly influenced by Britain's referendum result.

Other issues apart from the referendum result were necessary. A G20 statement issued on Sunday pointed to the importance of decreasing excess production capacity in steel and other industries that has led to lower prices and an excess of supply.

"Not only Brexit but various risks of low growth remain, and there was a lot of debate on the need of monitoring developments including terrorism, geopolitical risks and refugees," said a Japanese finance ministry official.

The International Monetary Fund slashed its global growth forecasts on 19 July because of the Brexit vote, warning that the UK's decision has thrown a "spanner in the works" for the world's economy.