George Osborne has said the next Prime Minister could “absolutely” be from the Remain campaign amid warnings that taxes will go up and public spending cut back in the wake of the EU referendum result.

Mr Osborne, who yesterday ruled himself out of his party’s leadership contest, added the future Conservative leader would be a candidate who is able to articulate, in his view, “the clearest, crispest version of what relationship we are seeking” with the rest of the world.

Asked whether an individual in the Tory party, who argued the case for Remain, could lead the country Mr Osborne responded: “Yes, absolutely. I’m not backing any candidate at the moment but, of course, I was full throttled in arguing for remaining in the EU and because half of my party wanted to leave the EU I don’t think I can be the person to bring the party together at this moment – I’m just being realistic about that. “

The Chancellor also claimed that “it was not the responsibility” of those in the Remain campaign during the referendum to have articulated a vision for Britain outside the EU. “We as a country now have to determine which model we are seeking,” he added.

“I’m not a market speculator,” continued Mr Osborne when asked about the state of the nation’s economy. “But I think we are in a prolonged period of economic adjustment for the UK… it will not be as economically rosy as life inside the EU.

During the EU referendum campaign Mr Osborne joined forces with Alistair Darling, the former Labour Chancellor, to warn of an emergency Budget in the event of a Brexit. They claimed that £15 billion of tax rises and £15 billion of spending cuts would be needed to make up for a £30 billion “black hole” created by Britain’s exit from the EU.

On the emergency budget – dubbed the “punishment budget” by the Leave campaign – the Chancellor responded: “It’s very clear that the country is going to be a poorer as a result of what is happening to the economy.

“I think a crucial thing that is going to have to be provided is fiscal responsibility – we now, at our cost, what happens when you lose control of the public finances… we are absolutely going to have to provide fiscal responsibility to people.

6 ways Britain leaving the EU will affect you Show all 6 1 /6 6 ways Britain leaving the EU will affect you 6 ways Britain leaving the EU will affect you More expensive foreign holidays The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more nito100 6 ways Britain leaving the EU will affect you No immediate change in immigration status The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay Getty 6 ways Britain leaving the EU will affect you Higher inflation A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum AFP/Getty Images 6 ways Britain leaving the EU will affect you Interest rates might rise The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output Getty 6 ways Britain leaving the EU will affect you Did somebody say recession? Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018 AFP/Getty Images 6 ways Britain leaving the EU will affect you And we wouldn’t even get our money back All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget Getty Images

“In other words, we are going to have to show the country and the world that the government can live within its means.” When pressed on tax rises and spending cuts, the Chancellor added: “Yes, absolutely. But that decision will come under a new Prime Minister.”

Asked whether he regretted having a referendum on Britain’s membership of the EU, Mr Osborne responded: “I certainly regret the outcome because I fought passionately to Remain in the EU and I warned of the economic risks if we left the EU… we made a clear commitment to resolve this uncertainty which hung over Britain for decades.