The next Conservative government will have to cut spending even further and raise taxes to ensure the country can live within its diminished means post-Brexit, George Osborne has said.

The Chancellor said it was “very clear” that the country would be poorer following the people’s decision to leave the EU and while ruling out an immediate ‘emergency budget’, he said that the next prime minister would “absolutely” have to inflict further austerity measures on the population.

Once seen as the frontrunner to succeed David Cameron as Conservative leader, Mr Osborne’s reputation with the party lies in tatters following the Brexit vote, which he vehemently argued against, and he has ruled himself out from running in the imminent Conservative leadership contest.

Osborne breaks his silence

However, in an interview with BBC Radio 4’s Today programme – his first since Thursday’s vote – the Chancellor hit back at critics who have said the Government was under-prepared for a Leave vote. He said extensive contingency measures had been put in place to stabilise financial markets, but insisted that it was not the responsibility of those who had campaigned to stay in the EU to plan for the longer term future of Britain’s future relationship with Europe outside of the bloc.

“We need a plan as a country to get ourselves out of this, while respecting the decision of the British people,” he said. “We have extensive contingency plans for the financial stability consequences of Brexit… and we spent a long time preparing those plans. It was not the responsibility of those who wanted to remain in the EU to explain what plan we would follow if we voted to quit the EU. Those who wanted to quit the EU had a whole range of different visions. There were some who wanted all the benefits of EU membership without any of the costs. I’m not sure that’s very realistic

"We as a country and we as the Conservative party have to determine which model we are seeking in terms of our relationship with our nearest friends and allies. That is what the Conservative leadership contest is about.”

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

Mr Osborne said his staunch support for Remain meant he was not the leader to unify he party.

Asked whether he regretted the fact the referendum had been called in the first place – a decision he is understood to have privately argued against during the Coalition years – Mr Osborne said he regretted the result, but would not dispute the will of the people.

“Did I want Britain to remain in the EU? Yes. Did I fear the consequences if we quit? Yes. Did I argue passionately for that during the referendum? Absolutely I did… I’ve made my argument, the British people have chosen a different course but I love this country. As I say, my country right or wrong, I will do everything I can to make it work for Britain in the difficult months and years ahead.”