(Bloomberg) -- The U.K. will still be paying for Brexit in 2064, according to official forecasts that put the total bill for leaving the European Union at 37.1 billion pounds ($51.9 billion).
The full impact of Brexit on the British economy may never be known, the U.K.’s Office for Budget Responsibility said in a report on Tuesday, but trade growth is likely to slow, while business investment is already being held back.
One area where numbers are clearer is the agreement for Britain to pay a “divorce bill” to the EU when it leaves the bloc. According to the OBR’s calculations, this will be 41.4 billion euros, which fits with the government’s previous estimates.
While the majority of the cost -- around 75 percent -- will be met by 2022, payments to the EU could continue for liabilities such as the pensions of officials into the 2060s, the report said.
The U.K. has a plan to hold back payments of the exit settlement in order to force the EU to honor its promises on a trade deal.
The wider effects of changes to migration patterns and trade resulting from Brexit will dwarf the size of these divorce payments but Theresa May’s government has not yet provided enough detail to allow for reliable modelling of the future U.K.-EU arrangements, the OBR said.
“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,” the OBR said. “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.”
The OBR’s expectations include:
- The U.K.’s negotiation of new trade terms with the EU and other countries “will slow the pace of import and export growth” over a 10-year period;
- The U.K. will adopt a tighter migration regime after Brexit but will still fail to meet its target of cutting net inward migration to the desired “tens of thousands” of people per year;
- Investment growth will remain “subdued” in the face of Brexit-related uncertainty, “despite the current investment-friendly conditions created by historically-low borrowing costs;”
- As the post-Brexit trading regime is clarified, a slight boost to GDP growth is likely.
Alongside the OBR forecasts, the government allocated 1.5 billion pounds to help ministries prepare for Brexit. The Home Office, which oversees border security and immigration policy, received the most; followed by the Environment Department, which will take over running farm subsidy schemes, and the tax customs agency.