European leaders told Britain on Tuesday to act quickly to resolve the political and economic chaos unleashed by its vote to leave the European Union, a move the IMF said could put pressure on global growth.Financial markets recovered slightly after the result of Thursday''''s referendum wiped a record $3 trillion off global shares and sterling fell to its lowest level in 31 years against the dollar, but trading was volatile and policymakers said they would take all necessary measures to protect their economies.
British Finance Minister George Osborne, whose attempt to calm markets had fallen on deaf ears on Monday, said the country would have to cut spending and raise taxes to stabilise the economy after a third credit ratings agency downgraded its debt.
Firms have announced hiring freezes and possible job cuts, despite voters'''' hopes the economy would thrive outside the EU. European countries are concerned about the impact of the uncertainty created by Britain''''s vote to leave on the 27 other EU member states. There is little idea of when, or even if, the country will formally declare it is quitting.
"The process for the United Kingdom to leave the European Union must start as soon as possible," French President Francois Hollande said. "I can''''t imagine any British government would not respect the choice of its own people." European Commission President Jean-Claude Juncker sent a similar message as he prepared for talks with British Prime Minister David Cameron before an EU summit in Brussels, although he did not expect an immediate move.
"We cannot be embroiled in lasting uncertainty," Juncker told the European Parliament, which he interrupted to ask British members of the assembly who campaigned to leave the EU why they were there. Cameron, who called the referendum and tendered his resignation when it became clear he had failed to persuade Britain to stay in the EU, says he will let his successor declare the country''''s exit formally.
His Conservative Party has been split for years into pro- and anti-EU camps and the opposition Labour Party sank deeper into chaos on Tuesday. Labour lawmakers passed a vote of no-confidence in party leader Jeremy Corbyn by 172 to 40, accusing him of failing to win over traditional supporters during the referendum campaign. The lawmakers fear that a similar failure at the next general election, due in 2020, will lead to Labour suffering a near wipe out as it suffered in Scotland last year.
However, the confidence vote does not automatically trigger a leadership election and Corbyn, who says he enjoys strong grassroots support, refused to quit. "I was democratically elected leader of our party for a new kind of politics by 60 percent of Labour members and supporters, and I will not betray them by resigning," he said.
NO CHERRY-PICKING Arriving for the EU summit, Cameron said: "I''''ll be explaining that Britain will be leaving the European Union but I want that process to be as constructive as possible, and I hope the outcome can be as constructive as possible. Holding out hope of maintaining good relations with other European countries, he said Britain wanted "the closest possible relationship in terms of trade and cooperation and security. Because that is good for us and that is good for them."