German Finance Minister Wolfgang Schaeuble has said he opposes a race of competitive tax cuts in Europe after Britain said it may slash corporate tax.
"We have no intention to start some sort of 'race to the bottom'", he said following plans by British finance minister George Osborne to slash corporation tax to avoid a business exodus after the 23 June Brexit vote.
Earlier today British business minister Sajid Javid said his government should introduce a raft of corporate and personal tax cuts to soften the blow from an expected slowdown in the wake of Britain's vote to leave the European Union.
Mr Javid told the Financial Times that the government needed to switch its focus from reducing the deficit to stimulating economic growth.
Mr Osborne last week dropped his policy of turning Britain's budget deficit into a surplus by 2020 and Mr Javid said this morning that it was now hard to predict what would happen to the deficit.
Mr Javid said he did not think it could be brought down to zero by 2020.
"Does it mean 3% becomes 4% or 5%? I don't think anyone can say at this point."
Meanwhile, MPs are set to vote on whether the government should guarantee that European Union nationals can stay in Britain after it pulls out of the bloc.
Labour will hold a debate and force a division in the Commons in an effort to ramp up pressure on Theresa May, the frontrunner to succeed David Cameron as prime minister.
The Home Secretary has so far failed to guarantee the status of three million EU nationals living in the UK, insisting it must be a part of Brexit negotiations despite a furious backlash from Tory MPs.
Brexit campaigners such as former UKIP leader Nigel Farage, who has pledged to work "informally or formally" with the next prime minister on those negotiations, have condemned Ms May's stance.
Mr Farage said he was "disgusted" while Labour MP Gisela Stuart, who chaired Vote Leave during the referendum campaign, criticised her for using EU nationals as "bargaining chips".
Labour made clear it expected Ms May to respond to shadow home secretary Andy Burnham at the beginning of the debate and called on candidates for the Tory leadership to declare their position in the vote.
The Opposition day debate and vote is non-binding and will have no effect on government policy although if Labour's motion is backed by a significant number of Tory MPs it will put pressure on ministers.
