Reeves says economic damage caused by Brexit forcing her to take action in budget

Rachel Reeves said she was rebuilding relations with the EU to reduce the cost of trade for British businesses. Photograph: Joe Giddens/PA

Rachel Reeves has blamed a heavier than anticipated blow from Brexit and austerity for forcing her to take action to balance the books at next month’s budget.

In her clearest attempt to draw Brexit into the framing of her imminent tax and spending decisions, the chancellor said leaving the EU was turning out to have caused more damage than official forecasters had previously outlined.