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Theresa May: Brexit will mean 'bumps in the road' Theresa May insists UK economy can withstand Brexit turbulence
(about 1 hour later)
Leaving the EU will not be "plain sailing" but the UK must grasp the opportunities, Theresa May has said. Theresa May has said the UK economy remains strong despite Brexit concerns which have hit the pound and seen growth forecasts for 2017 reduced.
The prime minister told the BBC that firms understood there would be "bumps in the road" but she was committed to getting the best Brexit deal for them. Sterling has fallen to a 31-year low against the dollar while the IMF cut its GDP forecast for next year to 1.1%.
The UK must not be "a supplicant" in the upcoming talks but be "ambitious" about what it could achieve. But, as the FTSE 100 rose to an 18-month high, Mrs May said the outlook was "more positive" than many expected.
She also insisted there was "no single measure" capable of reducing immigration to "sustainable" levels. The PM told the BBC's Laura Kuenssberg that her job was to make the process of EU exit as "smooth as possible".
She said she was still committed to the government's goal of reducing net migration to less than 100,000 but declined to say whether this was achievable by 2020. But she also acknowledged it would not be "plain sailing" and there would be "bumps in the road".
On Sunday, Mrs May said she would notify the EU of the UK's intention to leave between January and March 2017, beginning the process of formal negotiations over the terms of exit. She also suggested that curbing immigration by opting out of freedom of movement regulations would take precedence over remaining a full member of the EU's single market. Mrs May will give her first leader's speech to the Conservative conference on Wednesday against a backdrop of Brexit-induced jitters in foreign exchange markets.
The BBC's political editor Laura Kuenssberg said the prime minister was determined not to give much away about her EU negotiating strategy and objectives, but the reality was that many of her most senior ministers did not agree on what they were aiming for. The pound has continued to slide since the prime minister said official negotiations on the terms of exit would begin by next March at the latest and indicated that she was seeking restrictions on freedom of movement rules - a move seen as incompatible with remaining a member of the EU's internal market.
On Tuesday, sterling fell to a 31-year low against the dollar, continuing its slide since Mrs May set out the details of the timetable for Brexit negotiations on Sunday. However, at the same time, the FTSE 100 share index has risen above 7,000 for the first time since May 2015. In its latest economic analysis, the IMF said the UK would grow by 1.8% this year, slightly higher than previously forecast in July, saying consumer spending remained robust and market reaction to the EU vote had been "reassuringly orderly". As it released its report, the FTSE 100 share index rose above 7,100 for the first time since May 2015.
Mrs May told BBC Radio 4's Today that the negotiations would be complicated and that while "life is going to be different in the future... I want to ensure it is a success". 'Up and down'
She said businesses she had spoken to, including foreign companies with substantial workforces in the UK, realised the process would not be straightforward. But the IMF expects a significant slowdown in the UK economy next year, with growth down to 1.1% compared with 2.2% in 2015 and the 2.2% forecast before the Brexit vote, amid concerns about the outcome of the UK's negotiations with the rest of the EU.
"Of course they know it is not going to be plain sailing and there will be bumps in the road and they want certainty as soon as possible about the future holds but the attitude I am hearing is... 'let's make sure we come together and grasp the opportunities that are available'." Mrs May told the BBC's political editor that the negotiations would be complex but that the UK economy was in good shape, with employment at a record high and inflation at a record low.
Asked what kind of concessions the UK would have to make to retain full access to the single market, she said the UK should not be approaching the negotiations thinking what aspects of the EU membership it should keep, but should be thinking about what kind of relationship it wanted with the EU and the wider world as a "sovereign, independent" country. "Currencies, of course, go up and down," she said. "If you stand back and look at the fundamentals of our economy, which are strong, if you look at the other economic data that has been around in recent weeks, if you look at the most recent forecasts that are now coming out for growth in our economy this year, all of that is more positive than people had expected it to be."
"I am going to be ambitious as we go into discussions," she said. "I want British businesses to be able to trade with the EU and operate within the EU and EU businesses to be able to operate within the UK. Chancellor Philip Hammond has suggested the government will boost spending, through increased borrowing, to mitigate the impact of any weakening in economic conditions.
"It is not about the UK, in some sense, being a supplicant to the EU but the reciprocity here - a good trade deal is going to be a benefit to us and the EU." Mrs May said this was the right approach. "What the government needs to do is ensure that we are, in terms of the process of Brexit, making that as smooth as possible," she said.
Opposition parties respond to May "What matters is that we are clear about the deal we want to get for the British people. That's the right deal, a deal that ensures that British businesses have the maximum opportunity to trade with and operate within the European Union".
Jon Ashworth MP, Labour's shadow minister without portfolio, said: "It's increasingly clear that Theresa May is steering us down the road of hard Brexit despite having no idea where it leads. 'No supplicant'
"The 'bumps in the road' she talks about are real threats to our economy, yet she's recklessly ploughing on, putting jobs and prosperity at risk." Asked about her authority to lead the government and to pursue policies not in the Conservatives' 2015 manifesto, she said certain "adaptations" had to be made in response to the Brexit vote and rejected calls for her to seek a mandate from the people through an early general election.
Liberal Democrat leader Tim Farron said: "Theresa May this morning spoke about 'bumps in the road'. These 'bumps' as she blithely calls them, are people's jobs and livelihoods. She seems as out of touch as her ministers." "What we need is stability. You've talked about the economic situation, you've talked about markets. Actually what markets want is stability and a general election would give them instability."
Speaking earlier on BBC Radio 4's Today, she said the UK should not be approaching the negotiations thinking what aspects of the EU membership it should keep, but should be thinking about what kind of relationship it wanted with the EU and the wider world as a "sovereign, independent" country.
"I am going to be ambitious as we go into discussions," she said. "It is not about the UK, in some sense, being a supplicant to the EU but the reciprocity here - a good trade deal is going to be a benefit to us and the EU."
Opposition parties have accused the prime minister of making light of the economic difficulties which lie ahead.
Jon Ashworth MP, Labour's shadow minister without portfolio, said: "The 'bumps in the road' she talks about are real threats to our economy, yet she's recklessly ploughing on, putting jobs and prosperity at risk." And Liberal Democrat leader Tim Farron said: "These 'bumps' as she blithely calls them, are people's jobs and livelihoods. She seems as out of touch as her ministers."
On the third day of the conference, Home Secretary Amber Rudd said further controls on the number of foreign workers and students coming into Britain may be needed to reduce levels of net migration.On the third day of the conference, Home Secretary Amber Rudd said further controls on the number of foreign workers and students coming into Britain may be needed to reduce levels of net migration.
Mrs May - who will address the conference herself on Wednesday - said the authorities needed to be constantly aware of loopholes in the system but insisted there was no magic bullet to substantially reduce net migration - currently at more than 300,000 a year. Mrs May said she was still committed to the government's goal of reducing net migration from more about 320,000 currently to less than 100,000 but declined to say whether this was achievable by 2020 and said there was no single measure that would bring it about.
"Amber Rudd is already looking at what we need to do across the board to do that. There is not a single measure that suddenly brings all the numbers down."