Osborne warns of UK tax hikes, spending cuts if voters shun EU

British Finance Minister George Osborne, battling to keep the country in the EU, warned voters that he will take new austerity measures if they decide to leave the bloc in next week's referendum.

With opinion polls showing momentum swinging to the "Out" camp, Osborne intensified the tone of his warnings about the consequences of a so-called Brexit, saying he would respond by increasing taxes and cutting spending. "Quitting the EU would hit investment, hurt families and harm the British economy," he was due to say in a speech on Wednesday.

"I would have a responsibility to try to restore stability to the public finances and that would mean an emergency budget where we would have to increase taxes and cut spending," he said, according to excerpts of the speech which were sent to media by the Britain Stronger in Europe campaign.

An opinion poll published late on Tuesday showed the once double-digit lead of the "In" campaign had narrowed to just 1 percentage point. Other polls have shown the "Out" camp ahead, reducing the value of sterling and wiping billions of dollars off global stock markets.