London, July 1 (IANS) British Chancellor of the Exchequer George Osborne has, in the wake of Brexit vote, abandoned his target to restore government finances to a surplus by 2020.
In a speech he said, given the effects of the referendum vote, the government had to be “realistic about achieving a surplus by the end of the decade”, BBC reported on Friday.
The target of budget surplus has been the chancellor’s most prized goal and has been driving austerity measures in previous budgets.
But Osborne said the economy is showing “clear signs” of shock following the vote to leave the European Union.
Osborne said: “The referendum is expected to produce a significant negative economic shock to our economy. How we respond will determine the impact on jobs and growth.”
“We must provide fiscal credibility, continuing to be tough on the deficit while being realistic about achieving a surplus by the end of the decade.”
Labour’s shadow chancellor John McDonnell welcomed the move, saying: “Sadly the vote on last Thursday for Brexit has only brought forward what was inevitable.”
“The Chancellor had already dropped his other fiscal rules on welfare and debt at the Budget in March, and according to many economists he was expected to be forced to drop this one too.”