Brexit: France, Germany agree on contingencies

German Chancellor Angela Merkel and French President Francois Hollande have said they are in “full agreement” on how to handle the fallout from the UK’s decision to leave the European Union.

Mr Hollande warned that “separated, we run the risk of divisions, dissension and quarrels”.

The two will hold talks later in Berlin amid a flurry of diplomatic activity in the wake of so-called “Brexit”.

The pound fell further in early trading in Asia on Monday as markets reacted.

UK Chancellor George Osborne made a statement before the start of trading in the UK in a bid to calm markets.

He said the UK was ready to face the future “from a position of strength”, although he accepted the economy would have to confront challenges and that further volatility on financial markets was likely.

Mr Osborne said that thorough contingency plans were in place, in discussion with the Bank of England, and that “we are equipped for whatever happens”. He indicated that there would be no immediate emergency budget.

In other developments:

  • British Prime Minister David Cameron will hold a cabinet meeting on Monday
  • Boris Johnson, who led the Leave campaign and is tipped to replace Mr Cameron, has said the UK will continue to “intensify” co-operation with the EU
  • Embattled UK opposition Labour leader Jeremy Corbyn says he will stand in any new party leadership election amid calls for his resignation in light of the referendum result. Three more shadow ministers quit on Monday

Speaking on Sunday, Mr Hollande said there was no going back on the UK’s decision, adding: “What was once unthinkable has become irreversible.”

Chancellor Merkel is to host President Hollande, Italian Prime Minister Matteo Renzi and European Council President Donald Tusk later on Monday.