UK will have £84,000,000,000 black hole fuelled by Brexit

Chancellor Philip Hammond is facing an £84 billion black hole in public finances fuelled by Brexit in next month’s mini-budget, a think tank has warned.
That’s £1,634,615,384.62 a week.

Analysis of projections by independent forecasters shows the economy is expected to be £60 billion smaller in 2020 than was expected just before the referendum, the Resolution Foundation said.

That’s £1,153,846,153.85 a week.

It suggests that earnings will be around £700 a year lower than had been predicted by the end of the parliament and around 600,000 more people will be out of work.

In its report, the think tank says Mr Hammond is likely to face an £84 billion borrowing gap over the next five years when he delivers the autumn statement on November 23.

The Government has ditched former Chancellor George Osborne’s target for achieving a budget surplus by 2020.

Chancellor of the Exchequer Philip Hammond speaks on the second day of the Conservative party conference at the ICC in Birmingham. PRESS ASSOCIATION Photo. Picture date: Monday October 3, 2016. See PA story TORY Main.

Delaying by one year while still meeting Tory aims to develop an industrial strategy, help ordinary families and meet manifesto promises on income tax reforms, would mean billions in tax rises or spending cuts, the think tank said.

Going for a softer target by switching to a current budget balance in 2019-20 will give Mr Hammond leeway to meet the plans but would mean ‘significantly higher’ borrowing for years to come, it added.

Matt Whittaker, chief economist at the Resolution Foundation, said: ‘Despite the long-term impact of Brexit remaining very uncertain at this stage, there is a strong consensus among economists that post-referendum uncertainty will lead to deterioration in the public finances, which were coming in below expectation even before the referendum.

‘We won’t know the OBR’s verdict until November 23 but our analysis shows that the Chancellor may face a new £84 billion borrowing black hole and the prospect of breaking the fiscal rules inherited from his predecessor.