Osborne abandons 2020 budget surplus target
Chancellor George Osborne said he had abandoned his target to restore government finances to a surplus by 2020.
In a speech in Manchester, Osborne said the UK must be "realistic" about achieving a surplus. The controversial target had underpinned Osborne's austerity measures in previous budgets, attracting severe criticism for restricting his ability to act in times of financial stress.
“We need to reduce uncertainty by moving as quickly as possible to a new relationship with Europe and being super competitive, open for business and free trading. That’s the plan and we must set to it,” he said.
The UK economy was showing "clear signs" of shock in the aftermath of the vote to leave the EU he said.
“The government must provide fiscal credibility so we will continue to be tough on the deficit but we must be realistic about achieving a surplus by the end of this decade.”
His announcement comes after data showed the government borrowed £74.9bn for the year to March 2016, meaning it overshot its annual target of £72.2bn set by the Office for Budget Responsibility.
Osborne campaigned for Britain to remain in the European Union. With voters opting to leave in the referendum last week, and Prime Minister David Cameron resigning, his position is seen as under threat when a new leader is elected by the Conservative Party in September.
Home Secretary Theresa May, who is a leading candidate in the race to be the next Conservative Party leader and prime minister, said on Thursday that she would not order an emergency budget in response to the Brexit vote and would not call a snap election ahead of the scheduled date of 2020.
She said she was ready to abandon Osborne's surplus target if it was necessary to avoid tax rises.