Brexit vote could dig a £84bn hole in the City

New research has found

Britain’s new chancellor Philip Hammond faces an £84bn black hole over the next five years, according to the Resolution foundation.

The think tank blamed the gloomy figure on this summer’s EU referendum in which Britain voted to leave the European Union.

The likelihood of Britain reaching a surplus by 2020 is next to none, the Resolution Foundation said, with a £13bn deficit likely.

“The good news for Philip Hammond is that by softening his fiscal target he has significant political and economic room for manoeuvre,” Resolution Foundation chief economist Matt Whittaker said.

“But the trade-off for this approach is significantly higher borrowing in the coming years. The chancellor will need to decide if that is a price he is prepared to pay for adjusting to new economic times and setting out a direction for the new government.”

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