Chancellor Rachel Reeves will announce immediate steps to cut costs on Monday as she is expected to unveil a black hole in the accounts of around £20 billion.
She will lay out the spending inheritance left by the previous government – and announce the date of her first autumn Budget – on Monday afternoon as she pledges to “restore economic stability”.
She will say that a Treasury spending audit she commissioned shows that the previous government overspent this year’s budgets by billions of pounds after making a series of unfunded promises.
She will also accuse the previous Conservative government of “covering up the true state of the public finances”.
But according to Peter Stefanovic, Labour is dealing with a far bigger financial constraint that no one seems prepared to talk about.
The social media activist has pointed out that the UK’s decision to leave the European Union has left a shortfall in the UK’s public finances that is double the amount of money identified by Rachel Reeves.
Research conducted by Bloomberg shows Brexit is costing the UK £100 billion a year in lost output, which equates to roughly £40 billion less for the new Labour government to invest in the UK.
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Related: The Brexit Big Short: Pro-Leave backer made £220 million overnight by betting against the pound
