Philip Hammond appointed chancellor as George Osborne quits

May fired Hammond’s predecessor as chancellor, George Osborne, signaling a break with the governing Conservatives’ earlier commitment to deliver a budget surplus by the end of the decade.

Ratings agency Moody’s assigned a negative outlook to its grading of British government debt the day after the referendum, and analyst Kathrin Muehlbronner said there was now a lack of clarity on the government’s long-run budget plans.

He told Sky News: “George Osborne did a fantastic job of taking this economy from the disastrous position we were in 2010”.

“He has made some comments this morning about the importance of infrastructure spending etc, so I think there are some encouraging signs there that he wants to improve the supply side of the economy, improve its productivity performance”.

The Chancellor, who has been a staunch advocate of austerity, said: ‘Borrowing when the cost of money is cheap has some great attractions, but this country is already highly indebted and we need to be very careful about the signal we send to markets about our intentions.

“There is a massive difference between leaving the European Union and our relations with Europe which, if anything, are going to be intensified”.

French Foreign Minister Jean-Marc Ayrault sidestepped the customary diplomatic niceties to ask how a man who had told lies as leader of the Leave campaign in last month’s British EU referendum could be a credible minister. “But looking at how and when and at what pace we do that, and how we measure our progress in doing that, is something we now have to consider in light of the new circumstances the economy is facing”.

Britain’s new foreign secretary Boris Johnson will meet EU foreign policy chief Federica Mogherini on Sunday evening in Brussels but a planned dinner with Johnson’s EU peers has been canceled, the European Commission said. “Britain is open for business”.

Owen Paterson, the former Cabinet minister, yesterday warned there should be no watering down of the public’s desire to quit the Brussels club. “The lead and the tone will be set by the prime minister”.

Outgoing prime minister David Cameron said: “I came into Downing Street to confront our problems as a country and lead people through hard decisions so that together we could reach better times”.

EU leaders, however, are pressuring Britain to open formal exit talks sooner – and warning that the United Kingdom can not have access to the single European market of 500 million people without accepting the free movement of EU citizens, a sticking point for many pro-Brexit Britons.

May also created a new portfolio of so-called “Brexit secretary” and appointed David Davis, a former shadow home minister, to head the new department in charge of Brexit.

Foreign secretaries in Britain have traditionally stayed in a supporting role, refraining from saying anything remotely off-the-cuff or contentious – but that may be a stretch too far for Johnson.