Official forecasts suggest it will take until 2064 for the United Kingdom to pay off its Brexit costs. Those forecasts indicate that the bill Great Britain will face for leaving the European Union will be £37.1 billion.
Full Brexit Impact: Unknown
The same forecasters from the U.K.’s Office for Budget Responsibility stated that the total impact on the British economy may never be accurately calculated. These details were included in a report issued last week. It also suggested that the country’s trade growth will probably be slow. Moreover, business investment is already seeing some of the drop from Brexit’s approach.
Despite the fact that the final total may never be known, the “divorce bill” figures are becoming increasingly clear. The United Kingdom will be required to pay this amount to the E.U. upon its departure from the bloc. The Office for Budget Responsibility has tallied that bill to be €41.4 billion. This estimate aligns well with the government’s own previous calculations.
The Cost of Divorce
Even though most of the cost of the divorce bill (75 percent) will have been met by 2022, the payments to the European Union will likely be ongoing. They will cover the cost of certain liabilities such as pensions for officials that could carry on until well into the 2060s, said the report.
The United Kingdom intends to withhold payments of the divorce bill’s settlement until the European Union upholds its side of the deal with a trade deal.
Costs from Elsewhere
The broader impact of changes to trade and migration as a result of Brexit will likely make the divorce bill look tiny. However, Prime Minister Theresa May and her government have yet to release the data necessary to develop reliable models for potential deals between the U.K. and the E.U., said the Office for Budget Responsibility.
“Given the current uncertainty as to how the Government will respond to the choices and trade-offs facing it during the negotiations, we still have no meaningful basis for predicting a precise outcome upon which we could then condition our forecast,” said the office in the recent report. “Moreover, even if the outcome of the negotiations were predictable, its impact on the economy, monetary policy and the public finances would still be uncertain.”