The first official budget figures since Britain voted to leave the EU show a smaller-than-expected budget surplus. As post-referendum data continues to trickle in, attention is turning to what sort of access Britain will seek with its main trading partners in the EU. Kirsty Basset reports.
The latest data to trickle in following Britain's vote to leave the EU - A smaller than expected budget surplus in July, leaving it off track to meet its current fiscal targets. It comes at the end of a week where other data showed consumers weren't fazed by the vote to leave the EU - and little impact on the labour market in July. (SOUNDBITE)(English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "I think some of the scare stories ahead of the European referendum were overdone." But for Bank of England policymakers, these early readings offer only a narrow snapshot - compared with the years of economic uncertainty they see facing Britain - as it reworks its relationship with its main trading partners in the EU. (SOUNDBITE)(English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "We've seen rumours of course in the last 24 hours of a "Swiss plus" deal and earlier in the week about a "Canada plus" deal and I think this just resembles the phoney war associated with the lobbying from various parts of the UK economy of the UK government." Whether or not Britain can access the EU's single market, and control immigration, at the heart of the debate - as well as Britain's negotiating power. (SOUNDBITE)(English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "I think it's difficult to see the advantage being particularly on the UK's side. After all, we do 37 per cent of our trade here in the UK with the European Union and they only do about 4-5 per cent of their trade with the UK. So there is an imbalance there and I think that in the long term will mean that the EU-27 will get a better deal than the UK will." Britain is expected to define its negotiating position by the end of the year.