The challenges facing the post-Brexit U.K. economy are becoming clearer.
New official forecasts show that economic growth will slow to just 1.4% next year, down from 2.2% predicted in March, due to falling investment and weaker consumer demand.
That would be the weakest growth since 2009, according to IMF data.
The figures were announced Wednesday as part of the government’s first set of spending and tax plans since voters elected in June to leave the European Union.
Treasury chief Philip Hammond also announced plans to hike the minimum wage, invest £1.4 billion ($1.7 billion) in new housing and prohibit real estate agents from charging renters certain fees.
But with the goal of a balanced budget having already been abandoned, Hammond was constrained by a growing gap between government revenue and spending.
He said the decision to leave the EU makes “it more urgent than ever to tackle our economic challenges.”
Government borrowing is slated to increase, but Hammond said employment is expected to remain robust with 500,000 new jobs being added in the coming years.
“Hammond has a tough job on his hands,” said Fiona Cincotta, a market analyst at City Index. “It has become clear that U.K. finances are in no healthy state for a big spending splurge.”
Hammond has said that the U.K. economy must be “watertight ” to cope with the challenges brought on by Brexit.
The vote to exit the EU has slammed the pound, and the currency has slumped 17% against the dollar since June 23.
The broader economy is showing resilience, however. GDP grew at a better-than-expected 2.3% in the third quarter.
The Office of Budget Responsibility, the government’s independent economic watchdog, will release full details of its forecasts later on Wednesday.