Britain’s economy to grow more slowly after Brexit : UK finance minister Philip Hammond

British Chancellor of the Exchequer Philip Hammond speaking to Members of Parliament on November 23, 2016. (Photo by AFP)

Britain’s economy will grow more slowly over the next few years than was forecast as a result of the country’s vote to leave the European Union, UK finance minister Philip Hammond says.

Britain’s decision to exit from the EU, or Brexit, following a referendum in June, means the UK will grow only 1.4 percent in 2017 and 1.7 percent in 2018, compared with forecasts in March for growth of 2.2 percent and 2.1 percent, respectively, Hammond said Wednesday.

Hammond, the Chancellor of the Exchequer, also said the UK government would need to borrow billion of pounds more over the next five years to invest in infrastructure in order to offset the negative results of the Brexit vote.

"Our task now is to prepare our economy to be resilient as we exit the EU and match-fit for the transition that will follow," Hammond said during an annual fall statement to parliament.

"We will maintain our commitment to fiscal discipline while recognizing the need for investment to drive productivity and fiscal headroom to support the economy through the transition," he added.

Britain is now forecast to be running a deficit of £21.9 billion ($27.2 billion) by 2020, instead of a budget surplus, reflecting lower tax receipts as a result of weaker growth, Hammond said.

According to official estimates by the Office for Budget Responsibility (OBR), Britain's independent budget forecaster, the result of the Brexit vote will reduce economic growth in Britain and see debt levels rise to new historic levels.

British gross domestic product (GDP) would grow by 1.4 percent in 2017, down from an estimate of 2.2 percent made in March, before voters decided to leave the EU, the OBR said Wednesday.

The OBR report also underscored that UK debt as a percentage of GDP would grow above 90 percent next year, levels not seen since 1964.