Tax rise, spending cuts likely: Osborne

LONDON: Standing by forecast of adverse effects on the economy made during the referendum campaign, British finance minister George Osborne said on Tuesday that

LONDON: Standing by forecast of adverse effects on the economy made during the referendum campaign, British finance minister George Osborne said on Tuesday that tax rises and spending cuts will be needed to deal with the “shock” to the UK economy caused by Brexit.

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Osborne said it was “nonsense” that the government had to have a plan to deal with the post-Brexit situation. It was the job of those who advocated Brexit, he said, and recalled the many Treasury analyses about its effects.

But decisions about tax rise and spending cuts should be made by the next prime minister, he told BBC, adding, his pre-referendum warnings “have started to be borne out by events”.

The pound meanwhile continued to take a hit along with stocks.

Speaking before a roundtable with business leaders, business secretary Sajid Javid said: “My objective now is to ensure that the negotiation of our future relationship with the EU is carried out in the interest of UK companies, investors, potential investors and workers”.

He added: “There are significant challenges ahead, but the economic success of the past few years means we’re better able to withstand the current market turbulence and work towards a better future. The UK remains open for business”.