UK chancellor facing £25b hit to UK budget, says IFS

London

UK Chancellor of the Exchequer Philip Hammond is facing a £25 billion (S$43.2 billion) hole in the public finances following the Brexit vote, the Institute for Fiscal Studies warned.

Diminished growth will result in £31 billion of lost tax revenue, only partially offset by a £6 billion reduction in spending if Britain ceases to contribute to the European Union (EU) budget, the non-partisan research group said in a report published on Tuesday. It means the UK is heading for a deficit of £14.9 billion in 2019-20 instead of the £10.4 billion surplus predicted in March by former chancellor, George Osborne.