A Tesco spokesperson told ITV News they have removed a fancy dress costume called "Psycho Ward" from their website and apologised "for any offence caused".
A spokesperson said: "We're really sorry for any offence this has caused and we are removing this product from sale.”
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The chancellor now faces the prospect of forming a minority government or calling for a snap election.
The 73-year-old said a return is unlikely "given the politicised atmosphere that seems to have afflicted our set."
Chancellor Philip Hammond said the UK will make a financial proposal to the EU in the next three-and-a-half weeks.