British Chancellor Philip Hammond has warned that whoever succeeds Theresa May as the country’s prime minister must limit their promises within the bounds of accepted fiscal responsibility and called on the top candidates to “be honest” as their spending pledges “greatly exceed” the capacity of the economy.

While both Boris Johnson and Jeremy Hunt vow to leave the EU on 31 October, Hammond has warned that a no-deal economy would require support. He made clear that the fiscal headroom of £26.6 billion announced in his spring statement was available only in the event of a smooth Brexit with a transition period. With no deal, the budget would be faced with an extraordinary expenditure and a “hole” in public finances.

Hammond has pledged to deliver a provisional “no-deal Brexit budget” in early September ahead of the UK’s planned 31 October departure from the bloc. His rival, Boris Johnson, has reiterated his own commitment to a “hard deadline” for Britain’s withdrawal from the EU.

In addition to a hard negotiating tactic, both Johnson and Hunt also want to pursue tax cuts and additional spending on education, social care, and health. According to the Institute of Fiscal Studies (IFS), Hunt’s policy proposals alone could cost £37-65 billion, well above the available fiscal space that would be available in the event of an orderly Brexit.

The decision for who will become the next British prime minister lies with 160,000 Conservative Party members and the winner will be announced on July 23rd.