Philip Hammond confirms UK will leave the single market after Brexit

Philip Hammond has said Britain will come out the single market as part of its decision to leave the EU, but will negotiate access to the bloc.

“We will come out of the single market as a result of our decision to leave the European Union," Theresa May's new Chancellor told LBC.

“The question is how we negotiate with the European Union, not from the point of view of being members of it but from the point of view of being close neighbours and trade partners of it."

He added: "I would like to see us negotiating access to the single market for Britain's businesses, so we can go on selling our goods and services into the European Union market and indeed enjoying the benefits of consuming European Union goods and services here as we do now."

Mr Hammond is one of a number of new appointments to the Conservative cabinet, which saw the surprise appointment of Boris Johnson the new Foreign Secretary.

Mr Johnson, who has previously made several controversial quotes about world leaders, said he was "obviously very, very humbled, very, very proud to be offered this chance".

When asked by a Sky News reporter whether he planned to apologise to US President Barack Obama for controversially saying the "part-Kenyan" president was biased against Britain because of "an ancestral dislike of the British empire", Mr Johnson quipped: "The United States of America will be in the front of the queue."

In his first interview after being appointed Chancellor, Mr Hammond said there will be no emergency budget following the EU referendum vote.

He told BBC Radio 4's Today programme: "We will face some challenges in the short term in managing the economy. It has had a shock as a result of the decision on June 23 to leave the European Union.

"That has shaken confidence, it has caused many businesses to pause investment decisions that they were making.

"The challenge for us now is to send signals of reassurance about the future as quickly and as powerfully as we can to the international investment community, to British business and to British consumers, so we can get those decisions starting to be made and investments starting to flow into the UK."

During the EU referendum campaign, the former Chancellor George Osborne joined forces with Alistair Darling, also a former Chancellor, to warn of an emergency budget in the event of a Brexit vote.

Together they claimed that £15 billion of tax rises and £15 billion of spending cuts would have been needed to make up for a £30 billion “black hole” created by Britain’s exit from the EU.

Mr Hammond said investment, job creation and business confidence had all been hit since the referendum result.

"There has been a chilling effect. We have seen an effect in markets, we have seen business investment decisions being paused because businesses now want to take stock, want to understand how we will take forward our renegotiation with the EU, what our aspirations are for the future trading relationship between Britain and the European Union."