By Jason Douglas

LONDON--The U.K. economy will grow more slowly over the next few years than was forecast before the country voted to leave the European Union, Treasury chief Philip Hammond said Wednesday, as he announced the government won't seek to close the U.K.'s budget deficit until after elections in 2020.

He added the government plans to borrow more in the coming years to invest in infrastructure.

In an annual fall statement to parliament, Mr. Hammond said Britain's decision to exit from the EU in a referendum in June means the U.K. will grow just 1.4% next year and 1.7% in 2018, compared with forecasts in March for growth of 2.2% and 2.1%, respectively.

He said the government's job following the referendum result will be to bolster the economy's resilience to ensure it can weather any turbulence associated with Brexit, as well as tackle longstanding weaknesses including lopsided regional growth and poor productivity.

"Our task is to prepare our economy to be resilient as we exit the EU, and match-fit for the transition that will follow," Mr. Hammond said.

The Chancellor of the Exchequer said that instead of a budget surplus by early 2020, the U.K. is instead now forecast to be running a deficit of GBP21.9 billion ($27.2 billion), reflecting lower tax receipts as result of weaker growth.

Mr. Hammond said borrowing will also be higher in coming years because he intends to borrow billions to improve Britain's infrastructure, such as roads and rail, in an effort to raise poor productivity.

Write to Jason Douglas at

(END) Dow Jones Newswires

November 23, 2016 08:32 ET (13:32 GMT)

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