Brexit to curtail euro zone growth, impact hinging on political leaders


"It is essential for both political and economic reasons that we continue calling for a clarification", he said, referring to the EU's repeated calls for the British government to invoke article 50 of the Lisbon Treaty as soon as possible, thus triggering the beginning of exit negotiations.

The analysis by the European Commission's economics directorate-general also concluded that Britain's GDP would be affected by between 1 and 2.5 per cent by 2017.

Co-ordinator of the march and founder of West Berks Action for Refugees Lindsey Middlemiss said: "This rally was about the way forward in future as much as the result of the EU Referendum".

"As prime minister, I will make sure that we leave the European Union", she said.

Also speaking at Farnborough, the U.S. Pentagon chief arms buyer Frank Kendall said Britain's vote to leave the European union was not expected to fundamentally alter its ties with the U.S. military or weapons-related trade.

"Brexit has brought to the fore the main obstacle to sustainable growth in the euro zone: a definitive clean-up of Italian banks' balance sheet", said Frederik Ducrozet, an economist at wealth management firm Pictet in Geneva.

Meanwhile, the eurozone's top official, Eurogroup president Jeroen Dijsselbloem, told Mrs May to "find solutions for the Brexit which has been causing a lot of problems particularly for the United Kingdom, but also for Europe".

The damage can be mitigated if politicians move swiftly to end uncertainty around the UK's next moves, Moscovici added. "That's what I think a lot of people expect and hope and call for", he told reporters as he entered talks with the EU's finance ministers. "We must be very adaptive to what happens".

It comes as Theresa May, who on Monday was confirmed as the new leader of the Conservative party, reiterated her stance at her victory speech that "Brexit means Brexit" and there will be no attempts to stay within the EU.

"The problem is financially manageable whatever way you look at it", Ducrozet said, adding that even if Rome made a decision to inject funds into its banks, sovereign bond yields were unlikely to spike thanks to the European Central Bank's bond buying programme. "Brexit is a structural change for Europe".

"We need a plan, we need workers rights, human rights and environmental protections to not be eroded. So yes in that respect the nomination of Theresa May [could] be good news for the process itself".

CNBC is a recognised world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide. "We French will be one of the most demanding countries", he said, especially regarding the City of London's financial district's ability to trade in euros.