The Latest: Carney, Yellen skip conference, focus on markets
LONDON (AP) — The Latest on Britain’s historic vote to leave the European Union (all times local):
The chiefs of the Bank of England and U.S. Federal Reserve will not appear at a high-level banking conference in Portugal that they were due to speak at this week.
Bank of England Governor Mark Carney and Fed chair Janet Yellen were due to speak on a panel Wednesday but were taken off the updated schedule released Monday.
Though no official reason was given, the turmoil that has engulfed global financial markets since Britain voted to leave the European Union will have focused the minds of policymakers, particularly in Britain. As the British pound drops to a 31-year low, fueling inflation, and the country’s economy faces the risk of recession, the Bank of England will consider how to boost confidence.
Analysts say it could cut interest rates, a sharp reverse from its earlier plans to soon raise them.
German Chancellor Angela Merkel says she understands that Britain may need “a certain amount of time to analyze things” regarding its departure from the European Union but adds that a “long-term suspension” of the question wouldn’t be in either side’s economic interest.
British Prime Minister David Cameron has indicated he plans to leave invoking Article 50 of the EU treaty, which would trigger negotiations on Britain’s exit, to his successor, who will be chosen in several months. Cameron resigned after his ‘remain’ side lost Thursday’s vote.
Merkel said Monday she has a “certain amount of understanding” for the fact that Britain may need “a certain amount of time” to analyze what happens next. She wouldn’t comment on whether it’s acceptable for London to wait until October, as Cameron plans.
She says EU leaders will discuss how much time Britain needs when they meet tomorrow in Brussels.
London Mayor Sadiq Khan has asked London police to be on heightened alert to deal with a possible increase in hate crimes as a result of the British vote to leave the European Union.
Khan said Monday there would be “zero tolerance” for any attempt to divide communities. He spoke after a Polish diplomat complained about abuse directed at the Polish community since Thursday’s vote.
A Polish community center in west London was vandalized and police in Cambridgeshire are looking into reports of racist notes being given to Polish residents.
Immigration was a big issue in the vote. Those wanting to take Britain out of the EU say that will make it easier for Britain to control its borders.
Prime Minister David Cameron has also condemned a spate of racist attacks since the referendum, saying he would “not tolerate intolerance.”
Polish authorities are expressing concern over incidents of xenophobia directed at Poles and other foreigners in Britain following the British vote to leave the European Union.
The Polish ambassador in London, Witold Sobkow, said on Monday that his embassy is in contact with British police as they investigate the incidents.
In one reported case, offensive graffiti telling Poles to go home in vulgar terms was sprayed on the front of a Polish cultural center in London.
Sobkow said: “We are shocked and deeply concerned by the recent incidents of xenophobic abuse directed against the Polish community and other U.K. residents of migrant heritage.”
The number of senior leaders resigning form opposition Labour leader Jeremy Corbyn’s inner circle over his lackluster efforts to prevent a Brexit has grown ever larger.
Unlike Prime Minister David Cameron of the Conservatives, leader of the failed ‘remain’ side in the British vote on EU membership, Corbyn has refused to resign. But top Labour officials are resigning in droves, fearful that the party could be seriously hurt if Corbyn leads them into an early election that may be called.
Angela Eagle, the party’s spokeswoman on Business Innovation and Skills, has opted to resign from the senior party position in light of Britain’s vote to leave the EU. She is the most senior member of his team to resign.
Eagle says the party needs a leader “who can unite rather than divide the Labour Party.”
Over 20 members of Corbyn’s “shadow Cabinet” — experts in specific topics like health care or the economy — have resigned to protest his leadership.
French and German foreign ministers are calling for “a strong Europe,” listing ambitious long-term proposals following Britain’s decision to leave the EU.
Jean-Marc Ayrault and Frank-Walter Steinmeier pointed out some priorities for Europe in a document obtained Monday by The Associated Press: a common security agenda, fighting terrorism and integrated asylum and refugee policies.
They acknowledge there are “different levels of ambitions” among the European countries but say France and Germany are responsible for better cohesion and solidarity.
They suggest things like creating a European prosecutor for terrorism and organized crime as well as having international coast guard and border guard units. They also propose working on a common immigration law for Europe.
Ayrault stressed Monday that the British vote to leave the EU “could help Europeans become aware that Europe needs to come closer together.”
The pound has dropped to a new 31-year low, trading below $1.32 for the first time since 1985. By midday in London it was at $1.3216.
The drop reflects investors’ concerns about the economic impact of Britain’s departure from the European Union. It also shows they are expecting the Bank of England to cut interest rates in coming months as the economy suffers.
The Bank of England had until recent weeks been expected to consider raising interest rates this year, but analysts say it is now more likely to cut them by a quarter point before the end of the year. Lower rates tend to weaken a currency.
Investors also fled to the perceived safety of bonds. The yield on the 10-year British government bond fell below 1 percent for the first time ever to hit a record low of 0.96 percent. The yield drops as the price of a bond rises.
The top U.S. diplomat and NATO’s boss say the military alliance is even more important now as a result of Britain’s decision to leave the European Union.
U.S. Secretary of State John Kerry says he expects “an even stronger NATO going forward” as a result. He says the alliance brings clarity at a time of uncertainty in Europe.
And NATO Secretary-General Jens Stoltenberg said Britain’s vote to pull out of the EU makes NATO more important now for defense and security coordination among European allies.
Meeting Monday at NATO headquarters, Kerry and Stoltenberg said NATO was on track for its July 8-9 summit in Warsaw.
Kerry will later meet EU foreign policy chief Federica Mogherini. He then travels to London to meet British Prime Minister David Cameron and Foreign Minister Philip Hammond.
Though Britain has voted to leave the European Union, the nearly 1,000 British nationals who work for the bloc’s executive body won’t have to quit their jobs if they don’t want to.
EU Commission President Jean-Claude Juncker wrote in an internal memo circulated to the executive’s staff that according to regulations, they are “union officials” and work for Europe.
He wrote: “You left your national ‘hats’ at the door when you joined this institution and that door is not closing on you now.”
The memo was distributed to Commission personnel after the results of Thursday’s British referendum on EU membership became known. It was obtained by The Associated Press on Monday.
According to the British Permanent Representation to the EU, 980 British nationals work for the Commission, accounting for 4.2 percent of the total.
Britons are also employed by the EU’s External Action Service, Council and Parliament.
Italian Premier Matteo Renzi says Brussels can’t afford to spend a “year on procedures” for Britain’s exit from the European Union.
Briefing the Senate Monday, Renzi noted the EU “spent a year on negotiations” aimed at satisfying Britain ahead of last week’s referendum.
The premier will huddle later in Berlin with German Chancellor Angela Merkel, French President Francois Hollande and the EU president on the crisis.
The EU summit this week on Britain’s departure “won’t be the last” in Renzi’s view. But he says those meetings must concentrate on “the relaunching of Europe, not just procedures.”
Renzi says “pluck, lucidity and intelligence” is needed by European leaders, adding now’s not the time for improvisation.
His advice to the EU? “Deal more with social issues and less with bureaucratic issues.”
The implications of Britain’s departure from the European Union have started to bite on British businesses.
Real estate agent Foxtons has issued a profit warning, expressing concern that an upturn anticipated in the second half of the year is “now unlikely to materialize.”
The parent company of British Airways, IAG, warned on Friday that profits would take a hit this year. Budget airline easyJet also warned on profit, saying it anticipates economic and consumer uncertainty this summer.
The profit warnings come amid fears that thousands of jobs could be lost in London’s financial heartland. JP Morgan, HSBC and Goldman Sachs all said prior to the vote that thousands of jobs could be moved to the continent in the event of a British exit from the EU, or Brexit.
Trading in shares of two big British banks has been temporarily suspended amid volatility in the markets following the country’s decision to leave the European Union.
The London Stock Exchange says trading the Royal Bank of Scotland and Barclays was suspended when they briefly moved out of the trading range of 8 percent — an automatic action. RBS is down 14.6 percent to 175.55 pence ($2.4). Barclays is down 10 percent to 137.55 pence.
Trading resumed after five minutes.
Other British stocks are also experiencing sharp volatility in the aftermath of the vote. They include airline EasyJet, home builder Taylor Wimpey and insurer Legal & General.
German Chancellor Angela Merkel’s spokesman says there can’t be informal talks on the conditions for Britain leaving the European Union before London has filed formal notice of its intention to quit the bloc.
Only Britain can invoke Article 50 of the EU treaty, which triggers the formal process by which the country would leave the union. Departing Prime Minister David Cameron has signaled that that could take several months, while many European leaders want it to come immediately.
Merkel spokesman Steffen Seibert said Monday that “if the government needs a reasonable amount of time to do that, we respect that,” but the uncertainty cannot continue forever.
Seibert said: “One thing is clear: before Great Britain has sent this notification, there will be no informal preliminary talks about the exit modalities.”
The foreign minister of the Czech Republic says that a “fast and hasty integration” of the remaining 27 members of the European Union would be a “bad response” to Britain’s decision to leave the EU.
Foreign Minister Lubomir Zaoralek said Monday that doing nothing would also be bad, but that popular support was needed for further integration and new EU policies.
Zaoralek spoke after a meeting in Prague with his colleagues from Poland, Hungary, Slovakia, Germany and France.
Zaoralek said that “I hope we will be able to try and start persuading the people in Europe that the EU is a project that can appeal to them, that can solve the issues they are facing in a practical way.”
Another meeting of foreign ministers of non-founding members of the EU is scheduled to take place in Warsaw later Monday.
Former London Mayor Boris Johnson says there is no great rush to leave the European Union as he praised Treasury chief George Osborne’s efforts to calm gyrating financial markets.
Johnson, one of the most prominent campaigners behind the vote to have Britain leave the EU, also praised Osborne’s decision to forgo an emergency austerity budget.
Osborne had said such budget would be necessary during the campaign, which was nicknamed “Project Fear” because of its dire predictions on the fate of the nation in the event of a British exit from the EU, or Brexit.
Johnson told reporters Monday: “It’s clear now the Project Fear is over,” and that he was reassured by Osborne’s words.
Several more members of Britain’s opposition Labour Party have resigned from party posts, calling on leader Jeremy Corbyn to quit.
Half a dozen lawmakers who serve as spokespeople on key issues quit Monday morning. They follow 11 members of Corbyn’s shadow cabinet — the opposition party’s mirror government — who resigned Sunday after Corbyn fired Labour foreign affairs spokesman Hilary Benn for allegedly plotting against him.
Corbyn says he will not resign, and has appointed lawmakers loyal to him to fill the vacated posts. He insists he will run in any new leadership contest, and says he has the support of the party’s grassroots.
Many Labour lawmakers accuse Corbyn of running a lukewarm campaign in support of remaining in the EU. They also fear the left-winger cannot win a general election, which could come well before the scheduled date of 2020.
Conservative Prime Minister David Cameron has said he will step down by October, and a new prime minister may call an early election to solidify a mandate before negotiating Britain’s EU exit.
Germany’s defense minister says she doesn’t expect Britain to rejoin the European Union in her lifetime.
A majority of older British voters favored leaving the EU in Thursday’s referendum, while most younger voters wanted to stay in.
Defense Minister Ursula von der Leyen, who is 57, told Germany’s ARD television Sunday night: “Great Britain will not re-enter the European Union in my lifetime, but perhaps our children or grandchildren will be smart enough to restore the strength of Europe.”
Von der Leyen also added her voice to calls for Britain to clarify its intentions and trigger the negotiating process quickly. Departing Prime Minister David Cameron has signaled that he wants to wait several months to begin the country’s exit from the 28-nation bloc.
Asked to define quickly, she said: “I can’t define that in days or weeks. That is not in my hands. But the idea of ‘months’ takes some getting used to for us — it is actually not acceptable.”
A leading business group says 20 percent of its members plan to move some of their operations outside of the U.K. in light of the country’s decision to leave the European Union.
The Institute of Directors said Monday that a survey of its 1,000 members showed that three out of four believe that Britain’s exit from the EU, or Brexit, will be bad for business.
Simon Walker, the director-general of the group, says that while businesses will be busy working out how they are going to adapt, “we can’t sugar-coat this, many of our members are feeling anxious.”
The group says over a third of its members say that the vote result will prompt them to cut investment in their businesses.
Germany’s EU commissioner is urging Britain to clarify its intentions after voters chose to leave the European Union, and says he can’t imagine the government backing off that decision.
Departing Prime Minister David Cameron has signaled that he wants to wait several months to begin the country’s exit from the 28-nation bloc. Many European leaders want it to start immediately.
Commissioner Guenther Oettinger told Deutschlandfunk radio Monday that Britain’s governing Conservative Party needs to figure out what to do. He said: “With every day of uncertainty, investors in the whole world will be discouraged from investing in Great Britain or from believing in Europe.”
Oettinger said the referendum “has great authority, however much it annoys one.” He added that he “can’t imagine the British government putting that into question.”
The French finance minister is insisting that Britain pull itself out of the EU as soon as possible and is dismissing speculation that a British exit, or Brexit, may never actually come to pass.
Michel Sapin said on France-2 television Monday there is “no difference” between France and Germany on the timetable for a withdrawal, though French officials appear in a particular hurry to close this difficult chapter in post-war European unity.
“Should Britain go quickly? Yes. France, like Germany, thinks that Britain voted, Britain voted for Brexit, and the Brexit should be put in place starting now,” Sapin said.
He said European authorities should not allow Britain to stay in an “indefinite, we’ll see later” mindset but must force the British to accept the consequences of last week’s historic vote.
The British exit is priority No. 1 as French President Francois Hollande and German Chancellor Angela Merkel meet later Monday in Berlin with EU President Donald Tusk and Italian Prime Minister Matteo Renzi, ahead of an EU-wide summit Tuesday and Wednesday.
British and European stock markets fell again on Monday amid the uncertainty over what the U.K.’s vote to leave the European Union might lead to.
The FTSE 100 benchmark in London was down about 1 percent at 6,090 while Germany’s DAX was 0.5 percent lower at 9,509.
One of the reasons the FTSE 100 has not dropped more since Friday, when it closed only 3.2 percent lower, is that many of its listed companies earn money in foreign countries, and the pound’s sharp drop will translate into higher profits when that money is brought back to the U.K. The pound’s drop also makes those shares cheaper for investors outside Britain.
The pound continued to suffer the most losses in the markets, dropping another 1.6 percent against the dollar on Monday, to $1.3462. Since early Friday it has dropped to levels last seen in 1985.
Stockholm’s stock exchange, which was closed for a holiday on Friday, when the vote’s result caused heavy losses on global markets, dropped by 6 percent on Monday.
Treasury chief George Osborne has sought to calm nerves in the markets, as investors worry about the consequences of Britain leaving the European Union.
In his first public appearance since the vote to leave the bloc Thursday, Osborne tried to reassure markets shaken by the result, saying “our economy is about as strong as it could be to face this challenge.”
Yet, he acknowledged it would not be plain sailing in the days ahead.
The pound fell in Asian markets amid fears of the consequences of the vote. Political turmoil has roiled the country, as the leaders grappled with the question of how precisely the country would separate Britain from the other 27 nations in the bloc.
Germany, Britain and France will be meeting to discuss the decision.