The business secretary, Sajid Javid, has told business leaders there is no need to panic after Britain’s vote to leave the EU, as investors braced for another day of heavy selling when markets reopen on Monday.
Javid will hold an emergency roundtable with business representatives on Tuesday to discuss the referendum result and its implications.
The FTSE 100 index of Britain’s largest companies, which shed £120bn in value at one point on Friday, is forecast to open down 2.8% on Monday morning, a loss worth tens of billions of pounds. Stock markets around the world fell sharply on Friday following the referendum result and businesses said they would be forced to review their UK operations, putting thousands of jobs at risk.
According to reports this weekend, the uncertainty caused by the referendum could lead to the scrapping of £15bn of stock market flotations and major takeover deals falling apart. The £20bn merger between the London Stock Exchange and Deutsche Börse is at risk, and the South African company Steinhoff has said it is reconsidering a bid for the discount retailer Poundland.
Javid sought to soothe business leaders’ concerns in his first public appearance since the result of the referendum was announced on Friday.
“Now it’s a time for reassurance for business, and my message to them ever since Friday morning is there’s no need to be panicking at all,” he told the BBC’s Andrew Marr programme. “We have to have a calm approach, which is what we’ve seen since then.”
Javid insisted there was no vacuum at the top of Britain’s government, despite David Cameron’s announcement that he will stand down as prime minister. The business secretary, who campaigned for Britain to remain part of the EU, also refused to stand by claims made during the campaign that Brexit could lead to economic chaos and thousands of job losses.
“If we work together we can avoid some of things that were forecast,” he said.
The meeting with business leaders on Tuesday will include the head of the country’s leading trade bodies, the CBI, the British Chambers of Commerce, and the Federation of Small Businesses.
Despite Javid’s comments, however, business leaders are concerned about the impacts of Brexit.
Ronan Dunne, the chief executive of O2, said that younger people had been failed by the older generation in the vote. Figures from the referendum show that the younger generation voted overwhelming to remain in the EU, while over-65s, who turned out in greater numbers, did the opposite.
O2 is thought to have been considering a flotation on the LSE before the referendum, but there are now doubts about whether it will press ahead.
Dunne, who is also a non-executive director of Guardian Media Group, said: “Business leaders naturally focused on the economic issues that might arise as a result of the Brexit. On reflection it may well be felt that leaders, be they business leaders or others, were simply less effective in positively describing the reason for being members of the EU or indeed the more broad case of Britain as Europeans.
“There was a failure to articulate the possibilities of the future as aspired to by younger people and instead a debate about turning Britain back to a time in the past that will never return. It’s not a question of whether one time was better than another, rather what is the best future we can offer to our children.
“It is a sad case where young people have been failed by the older generation. Unfortunately, it will be millennials that will pay the price for this decision with sadly no benefit.
“Lastly Europe and the EU has, by most people’s opinion, provided the context for the longest period of peace within Europe in 1,000 years. This wasn’t highlighted well enough or we allowed people to ignore it. As an Irishman I positively acknowledged the role the EU played in Northern Ireland and the Good Friday Agreement.”
This article was written by Graham Ruddick, for theguardian.com on Sunday 26th June 2016 11.53 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010