Britain's economy is in such dire straits that it could find itself seeking a bailout from the International Monetary Fund, a leading investor has said.
Guy Hands said the UK's economic problems went deeper than the chaos unleashed by last month's botched mini-budget.
He said the downfall of Prime Minister Liz Truss marked the failure of the dream pursued by some Brexiteers of making Britain a low-tax, Singapore-style economy.
“Truss, to be fair to her, tried it. It clearly isn’t something that’s acceptable to the British people,” Mr Hands told BBC Radio 4's Today programme.
“Once you accept that you can’t actually do that, then the Brexit that was done is completely hopeless and will only drive Britain into a disastrous economic state.”
The UK economy would be “frankly doomed” unless the next prime minister rethinks Britain's relationship with the European Union, he said.
Asked what a worsening economy would mean for people, he said: “Steadily increasing taxes, steadily reducing benefits and social services, higher interest rates, and eventually the need for a bailout from the IMF like we were in the 1970s.”
Britain received a $4 billion loan from the IMF in 1976, amid economic storms that paved the way for Conservative icon Margaret Thatcher to come to power three years later.
Mr Hands, the founder of private equity company Terra Firma and a friend of former Tory leader William Hague since their days in student politics, evoked a catchphrase from the 1970s by saying Britain was becoming the “sick man of Europe”.
The Conservative Party “should now move on from fighting its own internal wars and focus on what needs to be done in the economy”, he said.
The race to succeed Ms Truss was moving towards a conclusion on Monday after former prime minister Boris Johnson called off his comeback bid.
Former chancellor Rishi Sunak is the overwhelming favourite to become the next leader, with cabinet minister Penny Mordaunt far behind in endorsements from MPs.
