May Says U.K. Economy Is ‘Strong’ as IFS Warns of Budget Hole

  • U.K. prime minister is concluding three-day visit to India
  • Institute for Fiscal Studies sees $31 billion hit to finances

Brexit Britain Warned of a £25 Billion Black Hole

The U.K. economy is “strong” and increasingly attractive to foreign investors, Theresa May said on Tuesday, after economists warned her government faces a 25 billion-pound ($31 billion) hole in its finances following the Brexit vote.

Leaving the European Union gives Britain a “world of opportunities,” the prime minister told U.K. broadcasters Tuesday during a three-day trade mission to India. Many of the businesses she has met are “very keen” to reach deals with the U.K., she said.

“I have spoken to Indian businesses keen to do business in the U.K. -- they see the fundamentals of our economy as being strong,” May told ITV News. “They want to do business in the U.K., I want to encourage that.”

May was speaking after the independent Institute for Fiscal Studies warned that the budget deficit will be 14.9 billion pounds by the end of the decade, instead of the 10.4 billion-pound surplus predicted in March. Weaker growth will hit tax income, which will not be fully offset by cuts to spending if Britain ends contributions to the EU budget, the institute said in a report.

“Remember the fundamentals of the U.K. economy are strong,” May told the BBC when asked for her views on the IFS study. “We’ve seen our deficit reduced by two-thirds. We are determined to continue to live within our means; of course we have seen in recent weeks some of the economic data for this year being revised upwards in terms of GDP. But what matters is us taking the opportunities that are now open to us to develop trade around the world.”

Complex Task

May told the BBC that her task in negotiating Britain’s exit from the EU will be complex, with challenges ahead.

“Of course we have got the negotiations on Brexit itself and the negotiations on trade,” she said. In a separate interview, May told Sky News it was time to move on from the rows over promises made during the referendum campaign. Asked if the campaign had been honest, she said: “I think what we need to do now is not focus on what happened during the campaign.”

“People voted on whether or not they wanted to leave the EU,” she said. “They voted to leave the EU and what I’m focusing on now and what I’m determined to do is to deliver on that and make a success of it.”

During her visit, May took a tour of a temple, wearing a green sari, and was treated to a fly-past of Indian warplanes intended to show the strength of the U.K.-India defense collaboration.

— With assistance by John Ainger

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