Osborne Moves To Calm Brexit Financial Turmoil

George Osborne will try to calm economic fears amid concern over the political power vacuum created by the UK's Brexit vote.

The Chancellor will make a statement before markets open in London and lay out the Government's plans to "protect the national interest" after the shock referendum result.

The move comes amid unprecedented political and economic upheaval, which has seen sterling plunge to a 30-year low against the dollar, the resignation of Prime Minister David Cameron and a coup against opposition leader Jeremy Corbyn.

The pound fell further overnight as markets opened in Asia, while top economists at investment bank Goldman Sachs predicted Brexit would push Britain into recession early next year.

A Treasury spokesman said: "The Chancellor will make a statement to provide reassurance about financial and economic stability in light of the referendum result and the actions that he and the rest of the Government will be taking to protect the national interest over the coming period."

The Chancellor is also under pressure to set out a timeline for opening negotiations on the terms of Britain's "divorce" from the EU.

Mr Cameron has insisted his successor should be the one to invoke Article 50 of the Lisbon Treaty which sets in train formal withdrawal procedures after he leaves Downing Street in October.

But EU leaders are becoming increasing impatient with this proposed delay as they insist the UK has opted to quit and needs to be out of the bloc as soon as possible.

Pro-Brexit leaders had hoped to hold informal talks with the EU before triggering the strict two-year timetable for exit set out in the Lisbon Treaty, but Brussels is hostile to the idea.

Mr Osborne will also need to clarify whether he will try to bring in the so-called "punishment Budget" comprising of £30bn worth of tax rises and spending cuts that he insisted during the referendum campaign would be necessary in the event of the UK voting for Brexit.

Pro-Brexit Tory MPs and the Labour leader made it clear that they would not vote for such a financial package if Mr Osborne tried to get it through the Commons.

In a note for clients that painted a bleak picture of Britain's future, Goldman Sachs economists Jan Hatzius and Sven Jari Stehn wrote: "We now expect the (British) economy to enter a mild recession by early 2017."

They said they expect the referendum outcome to chop a cumulative 2.75% off UK gross domestic product in the next 18 months and have knock-on effects in the US and European economies.