Chancellor hopes for Brexit transition period agreement 'as early as possible'

Chancellor Philip Hammond has said he hopes the Government will reach an agreement on a Brexit transition period "as early as possible".

Mr Hammond is understood to have persuaded Cabinet colleagues of the necessity for a transitional period lasting a number of years after the formal withdrawal date in March 2019, in order to avoid an abrupt withdrawal which would be disruptive to business.

He told ITV News that he hopes to begin talks on the issue by September or October, as part of the second phase of negotiations dealing with Britain's post-Brexit relationship with the remaining 27-nation EU.

The European Council is due to decide in October whether sufficient progress has been made on the first phase, dealing with the terms of departure, to be able to move on to the question of future relations.

"The European Union timeline is clear that we have to make sufficient progress on the initial set of issues that (Brexit Secretary) David Davis has been discussing in Brussels," Mr Hammond told ITV.

"We hope to have achieved that milestone by September or October, and we then expect to be able to go on to talk about this broader range of issues.

"We hope to be able to deliver agreement about an interim arrangement with the EU as early as possible."

Mr Hammond acknowledged the Brexit vote has had "painful" consequences for consumers, because of the inflation resulting from the fall in the value of sterling.

"Consumers are being affected by the inflation that was created by the depreciation of the currency in the autumn of last year," he said.

"That will pass through the economy, but I absolutely recognise it's painful as it's passing through the economy."

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