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UK will need to raise taxes after Brexit

Staff writer |
Britain will need to raise taxes and cut spending later this year to stabilize the public finances after last week's shock vote to leave the European Union, finance minister George Osborne said.

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Osborne said Britain would be poorer due to the public's decision to leave the EU, which he had campaigned against, and that the country now needed to deal with the economic consequences, as well as to tackle new social divisions.

Sterling plunged against the dollar to its lowest since 1985 after the vote, and two ratings agencies downgraded Britain's sovereign credit rating late on Monday.

"We need a plan as a country to get ourselves out of this, whilst respecting the verdict of the British people. That means financial stability, ending economic uncertainty and providing unity in our society," Osborne said in a BBC radio interview.

British police say there has been a spike in racist incidents since the June 23 vote.

Hours earlier Osborne had ruled out standing to succeed Prime Minister David Cameron, who said on Friday he would make way for a new leader of the Conservative Party after coming out on the losing side of a referendum he had called.

Osborne refused to be drawn on whether he had advised Cameron against the referendum, and said he himself was the wrong person to unify the Conservative Party, though another supporter of EU membership possibly could.

"I am not backing any candidate at the moment. I was full-throttled in arguing for remaining in the EU and because half my party wanted to leave the EU I don't think I can be the person who can bring the party back together at this moment."

Osborne said the leadership contest would allow the party to decide how close Britain should stay to the EU.

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