British premier insists the economy can withstand the fallout from the vote to leave the bloc.
LONDON — Prime Minister David Cameron insisted Monday that Britain’s vote to leave the European Union won’t send the economy into a tailspin, even as Standard & Poor’s stripped the United Kingdom of its top credit rating.
As stock markets and the pound continued to decline, Cameron insisted the British economy was robust and could withstand the shockwaves created by the result.
“It is clear that markets are volatile, there are some companies considering their investments and we know this is going to be far from plain sailing,” Cameron told lawmakers as the House of Commons met for the first time since last week’s referendum. “However, we should take confidence from the fact that Britain is ready to confront what the future holds for us from a position of strength.”
Hours after he spoke, Standard & Poor’s knocked the United Kingdom’s sovereign rating from triple-A to double-A. Hours later, Fitch Ratings followed suit, downgrading the country to double-A, from double-A-plus. Both agencies said they were keeping a negative outlook on their ratings, which means they could downgrade the country further.
Despite the uncertainty fueling financial instability, leaders in both Britain and the EU signaled there would be no immediate start to negotiations on an EU exit.
German Chancellor Angela Merkel met with her French and Italian counterparts and said “we agree there will be no formal or informal talks” until the British government officially declares its intention to quit by invoking Article 50 of the EU treaty.
The statement appeared to scotch hopes by Conservative lawmaker Boris Johnson and his Vote Leave campaign to hold preliminary talks on the general outlines of a deal before Article 50 triggers a two-year countdown to a British exit.
Earlier, Merkel said she understood that Britain may need “a certain amount of time to analyze things,” but said a “long-term suspension” of the question wouldn’t be in either side’s economic interest.
Cameron announced last week he would resign by the fall after failing to persuade a majority of voters to back continued EU membership.
Meanwhile, U.S. Secretary of State John Kerry, in Brussels and London to address fallout from the vote, said the U.S. has “immense confidence in ... the leadership on both sides of the channel” to negotiate a deal — and urged the EU not to treat Britain in a “revengeful” manner.
Prime Minister David Cameron says the economy can withstand the fallout from the vote to leave the EU.