Britain's new Chancellor, Philip Hammond, said on Thursday (14 July) that there will be no emergency budget to cope with the outcome of the European Union referendum.

Hammond, who replaced George Osborne as Chancellor on Wednesday night as part of new Prime Minister Theresa May's cabinet reshuffle, ruled out the prospect of the "punishment budget" his predecessor had alluded to in the lead-up to the referendum.

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"The Prime Minister made clear we will do an Autumn Statement in the usual way - in the autumn - and we will look carefully over the summer at the situation," he was quoted as saying by Sky News. "I'm seeing the governor of the Bank of England this morning and we will take stock."

Hammond's words represent a clear move away from the policies implemented by Osborne in his attempt to balance Britain's books. Two weeks before the referendum, the former Chancellor had warned voters that, in a case of a win for the 'Leave' campaign, the Government would have to push through an emergency budget, with £30bn worth of spending cuts and tax hikes.

In February, Hammond, who campaigned for the UK to remain in the EU, warned that Brexit would have a "chilling effect" on Britain's economy and trigger widespread uncertainty among businesses. He is now tasked with dealing with the financial outcome Brexit will bring to Britain, which could result in a recession.

"The biggest challenge going forward will be how the new Chancellor coordinates with EU officials and keep both his and their heads cool as the UK's economy may dip into recession," said Naeem Aslam, chief market analyst at Think Markets UK

"Hammond will also have to take some extreme measures with respect to belt tightening and many of these affairs will not be applauded by public. Investors will look for a new forecast for the economy by the new Chancellor and a wider deficit along with lower growth may be the most likely outcome of this forecast."

Philip Hammond