Britain to borrow $216 billion more than expected over next five years due to Brexit: Hammond

Chancellor of the Exchequer Philip Hammond leaves 11 Downing Street in London, Britain on Nov 23, 2016.
Chancellor of the Exchequer Philip Hammond leaves 11 Downing Street in London, Britain on Nov 23, 2016.PHOTO: EPA

LONDON (REUTERS) - Britain's government will end up borrowing 122 billion pounds (S$216.28 billion) more over the next five years than it expected before the country voted for Brexit, Finance Minister Philip Hammond said on Wednesday (Nov 23).

Britain is expected to run a Budget deficit of nearly 22 billion pounds in the 2019/20 financial year, which until recently had been the target date for a first Budget surplus, Mr Hammond said, citing forecasts from Britain's Budget office.

Mr Hammond's predecessor as finance minister, Mr George Osborne, had been aiming for a surplus of 10.4 billion pounds in 2019/20.

But that target was dropped shortly after voters decided in June to leave the European Union. The Brexit vote is likely to slow the economy in the coming years, reducing tax revenues for the government and increasing its bill for jobless benefits.

In the current 2016/17 financial year, the deficit is now expected to stand at 68.2 billion pounds, higher than the pre-Brexit vote estimate of 55.5 billion pounds, and there was no forecast for a surplus over the next five years, Mr Hammond said.

 
 
 

"The prime minister and I remain firmly committed to seeing the public finances return to balance as soon as practicable... while leaving enough flexibility to support the economy in the near-term," he said.