A downturn in the economy caused by Brexit could lead led to the UK having £84bn black hole in its finances, a think tank has warned.

The Resolution Foundation has published a report showing a fall in tax revenues combined with higher spending by the UK Government could lead to £84bn being unaccounted for in the government's spending plans by 2021.

Before the EU referendum, then-Chancellor George Osborne promised to return UK finances to a surplus by 2020.

His replacement, Phillip Hammond, has said the government will no longer be able to achieve that.

The Resolution Foundation forecasts the UK will be in deficit for every financial year until 2021.

Matt Whittaker, chief economist at the foundation, said: "Post-referendum uncertainty will lead to deterioration in the public finances, which were coming in below expectation even before the referendum.

"The good news for Philip Hammond is that by softening his fiscal target, he has significant political and economic room for manoeuvre."

The think tank suggests the Chancellor should turn the government's focus from its previous commitment of achieving a fiscal surplus to instead aim to achieve a balanced budget by in 2020.

Whittaker said: "But the trade-off for this approach is significantly higher borrowing in the coming years.

"The Chancellor will need to decide if that is a price he is prepared to pay for adjusting to new economic times and setting out a direction for the new government."

On Thursday, the UK's GDP figures will be published, with analysts predicting they will show the country's growth rate has falling from 0.7% in the second quarter to 0.3% in the third quarter.

A mistakenly published document by the Treasury on Thursday highlighted how off course the UK is to reducing its deficit.

The document said: "For the year to date the deficit is £2.3bn lower than last year; at a fall of 4.8%, well behind the 27.0% reduction forecast".