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    UK Chancellor Osborne Abandons 2020 Budget Surplus Plans Amid Brexit Shocks

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    The Conservative government is abandoning the target of reaching a budget surplus by 2020 in the aftermath of last week's Brexit vote, UK Chancellor of the Exchequer George Osborne announced on Friday, speaking to business leaders in Manchester, according to The Guardian.

    MOSCOW (Sputnik) — On Thursday, Bank of England Governor Mark Carney said that the bank might undertake monetary measures to stimulate the UK economy amid a deteriorating outlook due to Brexit referendum results.

    "The referendum result is as expected likely to lead to a significant negative shock for the British economy. How we respond will determine the impact on people’s jobs and on economic growth. The Bank of England can support demand. 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. This is precisely the flexibility that our rules provide for," Osborne said.

    Osborne unveiled the surplus plan in November while presenting the national Spending Review to the House of Commons. The chancellor had planned to reduce the government's structural deficit every year, expecting to reach a 10 billion-pound ($15 billion) surplus by 2019-2020 by cracking down on tax avoidance, cut benefits and introduce apprenticeship levies.

    The United Kingdom must be realistic about the prospects of achieving the targets as the signs of a Brexit-induced shock spread through the economy, Osborne stressed.

    On June 23, the United Kingdom held a referendum to determine whether or not the country should leave the European Union. According to the final results, 51.9 percent of voters, or 17.4 million people, decided to support Brexit, while about 16.1 million opposed it.

    After the results were revealed, UK Prime Minister David Cameron announced that he would resign by October and the Conservative Party launched a campaign to elect a new leader. It remains unclear whether Osborne will remain in the Conservative cabinet.

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    Britain Says 'Cheerio' to EU (463)

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