[E.U]–On Wednesday, Philip Hammond, British Treasury Chief, while speaking on the budget, intimated the media with the government’s plans to increase taxes and mitigate government debt, in order to tackle whatever unexpected occurrences in the wake of Britain’s separation of the European Union.
According to Hammond, the budget “strikes the right balance between reducing our deficit, preserving fiscal flexibility and investing in Britain’s future.”
As CNN reports, the moves are designed to give the government “headroom” to borrow billions in emergency money in case Brexit causes significant economic damage, explained Lucy O’Carroll, chief economist at Aberdeen Asset Management.
The government’s position is being helped by stronger than expected economic growth — and tax revenue — in the wake of the June referendum. The Office for Budget Responsibility on Wednesday upgraded its growth forecast for 2017 to 2% from 1.4% in November.
According to Hammond, the budget will give the government the freedom to borrow up to £26 billion ($31.7 billion) in extra funds in the 2020-2021 fiscal year, should there be a need for that.
Prime Minister Theresa May is expected to begin talks for the U.K. to leave the EU in the coming weeks.
The most probable outcome is that Britain will leave Europe’s unified free trading market and be forced to negotiate new terms of trade with the region.
Recently, May’s plans have been facing hindrances from the House of Lords which opted to attach amendments to Brexit legislation.
Also, the country’s economy is beginning to show signs of a drastic crumble.
The British pound has dropped by 19% from the week before the Brexit vote.Please Follow Us @ThePageNg