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UK Treasury chief tries to calm markets amid Brexit fears

London - Treasury chief George Osborne sought on Monday to ease investor concerns about Britain's vote to leave the European Union, saying the UK economy is as strong as it could be to face the challenge.

In his first public appearance since Thursday's referendum, Osborne stressed that Britain's economy is in a far better position than it was at the start of the 2008 financial crisis.

"It will not be plain sailing in the days ahead," he said. "But let me be clear. You should not underestimate our resolve. We were prepared for the unexpected."

The pound plunged to its lowest level in 30 years on Friday and fell another 2% against the US dollar before Osborne's remarks. The currency clawed back some of those losses after the speech and traded at 1.3462 as of 8:04 London time.

Britons voted by 52% to 48% in favour of leaving the European Union in a vote that sent shockwaves through the financial markets, toppled Prime Minister David Cameron and put world leaders in crisis mode.

European stock markets mostly slid on Monday amid Osborne's attempt to calm jitters after last week's shock Brexit referendum.

The surprise decision to leave the European Union wiped $2.1 trillion off market valuations on Friday and sent the pound collapsing to a 31-year low against the dollar.

"The fallout from the UK's vote against EU membership continues to ripple through financial markets," Accendo Markets analyst Mike van Dulken told AFP.

On Monday, London's benchmark FTSE 100 index of top blue-chip companies fell 0.7% to 6 098.70 points, compared with Friday's closing level.

The pound meanwhile dropped to $1.3392 but held above Friday's 31-year low of $1.3229 - the worst level since September 1985.

Osborne said Britain's economy was "as strong as could be" to deal with the fallout of Thursday's momentous Brexit vote, which has already claimed the scalp of Prime Minister David Cameron and fuelled fears of a break-up of the United Kingdom.

In eurozone equity trading, Frankfurt's DAX 30 index dipped 0.1% to 9 544.0 points and the CAC 40 in Paris shed 0.2% to 4 097.3 points.

On the upside, Madrid's IBEX 35 index rallied almost 3% on investor relief over Spain's weekend election.

"The UK stock market has been relatively stable at the start of the week as investors absorb the ramifications of Friday's momentous events, aided by reassuring comments from UK Chancellor Osborne," said RIA Capital Markets macro strategist Nick Stamenkovic.

"However, the pound looks vulnerable particularly against the dollar as investor demand for safe-haven assets persists."

No need to rush EU exit - Johnson

Top Brexit campaigner Boris Johnson said there was no need to rush pulling Britain out of the EU, as he sought to reassure Britons abroad and EU citizens in Britain with a message of continuity on Monday.

Johnson also urged Brexit backers to "build bridges" with those who voted for Britain to stay in the EU after Thursday's bitterly divisive referendum and played down the prospects of Scottish independence.

"The only change - and it will not come in any great rush - is that the UK will extricate itself from the EU's extraordinary and opaque system of legislation," Johnson wrote in his column for the Daily Telegraph.

"EU citizens living in this country will have their rights fully protected, and the same goes for British citizens living in the EU," wrote Johnson, the former mayor of London and a favourite to succeed the outgoing Conservative Prime Minister David Cameron.

"British people will still be able to go and work in the EU; to live; to travel; to study; to buy homes and settle down," he said.

Osborne pledges not to impose a new austerity budget

In a move certain to buoy the markets, Osborne pledged not to impose a new austerity budget - even though he had said during the campaign that one would be necessary. The move seemed intended to reduce uncertainty, putting to bed the possibility of tax rises or other potential hits on the economy.

Osborne said he had been working closely with Bank of England Governor Mark Carney and fellow finance ministers and international organisations over the weekend.

"We are prepared for whatever happens," he said.

In another move to try to slow the reaction, Osborne stressed that only Britain can invoke Article 50, which triggers the formal process by which the country would leave the EU. He said that the UK "should only do that when there is a clear view about what new arrangement we are seeking with our European neighbours."

Cameron is expected to chair an emergency Cabinet meeting on Monday. America's Secretary of State, John Kerry is visiting Brussels and London to address the fallout from the vote.

Political turmoil has roiled the country in the days since the vote, as the leaders grappled with the question of how precisely the country would separate Britain from the other 27 nations in the bloc.

Opposition Labour leader Jeremy Corbyn is also facing upheaval within his own party, after about a dozen of his closest advisers quit his inner circle. The advisers believe Corbyn's lackluster campaign in support of remaining in the EU fatally undermined his ability to lead.

The vote is also causing a political schism in the UK overall. Scottish First Minister Nicola Sturgeon said she would "consider" advising the Scottish Parliament to try to use its power to prevent Britain from actually leaving the EU.

She said Scottish lawmakers might be able to derail the move by withholding "legislative consent" for a British exit, or Brexit.

Britain will retain close ties with Europe - Johnson

Johnson said Britain would retain close ties with Europe despite warnings during the campaign from those who wanted Britain to stay in the EU.

"There will still be intense and intensifying European cooperation and partnership in a huge number of fields: the arts, the sciences, the universities, and on improving the environment," he said.

Johnson also urged Brexit supporters to "build bridges" with Britons who had supported staying.

"They are our neighbours, brothers and sisters who did what they passionately believe was right.

"We must reach out, we must heal, we must build bridges - because it is clear that some have feelings of dismay, and of loss, and confusion," he wrote.

But he added that the "climate of apprehension" was caused by exaggerated warnings during the campaign.

"At home and abroad, the negative consequences are being wildly overdone, and the upside is being ignored," he said.

He also reacted to Sturgeon's statement that a new independence referendum within two years was now "highly likely" because most Scots had voted to stay in the EU.

"We had one Scotland referendum in 2014, and I do not detect any real appetite to have another one soon.

"It goes without saying that we are much better together in forging a new and better relationship with the EU - based on free trade and partnership, rather than a federal system," he said.

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