Britain will need to raise taxes and cut spending later this year to stabilise the public finances after last week's shock vote to leave the European Union, the UK finance minister George Osborne said today.
Mr Osborne said Britain would be poorer due to the public's decision to leave the EU, which he had campaigned against.
He added that the UK now needed to deal with the economic consequences, as well as to tackle new social divisions.
Sterling plunged against the dollar to its lowest since 1985 after the vote, and two ratings agencies downgraded Britain's sovereign credit rating last night.
"We need a plan as a country to get ourselves out of this, whilst respecting the verdict of the British people. That means financial stability, ending economic uncertainty and providing unity in our society," Osborne said today.
British police say there has been a spike in racist incidents since the June 23 vote.
Hours earlier Osborne had ruled out standing to succeed Prime Minister David Cameron, who said on Friday he would make way for a new leader of the Conservative Party after coming out on the losing side of a referendum he had called.
He said the leadership contest would allow the party to decide how close Britain should stay to the EU.
Before the referendum Osborne said Britain would need an emergency budget to impose extra austerity if the country voted to leave the EU, but yesterday he said this would have to wait until Conservative party members elected a new leader.
When asked today if new budget measures would involve tax rises and spending cuts, Osborne said "Yes, absolutely."
"We are adjusting to life outside the EU and it will not be as economically rosy as life inside the EU," he said.
