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Chancellor George Osborne has warned that it is “inevitable” that the UK economy will have to adjust in the wake of Brexit but said there will be no immediate emergency Budget.

He tried to calm financial markets with an optimistic statement saying that the UK is ready to face the future “from a position of strength”.

Osborne added the process of the UK separating from Europe could only begin once Article 50 of the Lisbon Treaty was invoked.

“And in my judgement, we should only do that when there is a clear view about what new arrangements we are seeking with our European neighbours.

“In the meantime, during the negotiations that will follow, there will be no change to people’s rights to travel and work and to the way our goods and services are traded or to the way our economy and financial system is regulated.”

The FTSE 100 has opened down 0.5% to 6,110.91 points, which is not as bad as the sell-off feared by the City last night. Sterling was dragged down by heavy selling in Asia but has recovered some of those early losses thanks to Osborne’s efforts to calm the markets.

Morning update

The markets are also much calmer in the grocery and fmcg sectors after big sell-offs on Friday. The big mover this morning is Ocado ahead of its interims tomorrow. The online grocer has already plunged 8% to 222.1p so far, putting the stock down almost 30% since the start of the year.

Marks & Spencer (MKS) is also down a substantial 5.5% to 308.6p – down more than 30% so far in 2016.

Associated British Foods (ABF) is down 3.2% to 2,686p; Poundland (PLND), which turned down a bid from Steinhoff on Friday, has fallen another 5.3% to 183p; and WH Smith (SMWH), one ofFriday’s big fallers, has dipped 2% to 1,488p.

The listed grocers fared little better with Tesco (TSCO), Sainsbury’s (SBRY) and Morrison (MRW) down 1.7% to 159.6p, 2.8% to 220.8p and 2.5% to 220.8p respectively.

But stocks which rely on overseas markets for the majority of their revenues were trading up this morning, with Unilever (ULVR) rising 1.8% to 3,325p, Diageo (DGE) up 2% to 1,914.7p and Reckitt Benckiser (RB) up 0.8% to 1,914.7p.

Elsewhere, Delhaize (DELB) has announced the sale of Tom&Co, its pet specialist shop for pet feed and pet care, as it seeks to focus on the core business. An investment group led by Lionel Desclée, current member of the management of Delhaize Belgium, take over Tom&Co. Founded in 1991, Tom&Co operates 144 stores in Belgium, Luxembourg and France of which 136 franchised stores and eight own stores.

This week in the City

There is a number of retail updates this week on the London Stock Exchange, chief among them the first-half numbers from Ocado.

The online grocer will face questions tomorrow on what it is doing to stave off the threat from Amazon Fresh and whether it is any closer in its search for an international partner.

There will also be the latest Kantar and Nielsen grocery market share data on Tuesday and the monthly GFK Consumer Confidence survey first thing on Thursday.

There is little else scheduled on the markets this week, but in wider retail there is the and the Carpetright finals on Tuesday and Dixons Carphone finals the following day.