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06th Jul 2022

Cost of Brexit laid bare as divorce bill and lost output weighs heavy on UK

Jack Peat

Estimates suggest the UK’s divorce from the EU will cost £100 billion in lost output over the long-term

The cost of Brexit has been laid bare after new government figures forecast an eye-watering loss in output over the coming years.

The Office for Budget Responsibility says Brexit will have a long-term effect of cutting UK GDP by a hefty 4 per cent, an estimate that has remained unchanged since early 2020.

According to Financial Times’ estimates, such a decline amounts to £100 billion in lost output, and £40 billion less revenue to the Treasury a year.

In 2020, when the UK was still part of the EU, its net public sector contribution to the bloc was just £12.6 billion, leaving Otto English to point out that the divorce could now well exceed what Britain once paid in – but with none of the benefits.

Speaking to the Guardian, Geoffrey Betts, the managing director of a small office supplies business in Marlow, Buckinghamshire, said he had high hopes for his firm, and the British economy, when he voted for Brexit.

“I thought we would be like … ‘here we go, here we go. We are going to become the most competitive country in Europe and we are going to be encouraging business.’ Now I think: ‘What have we done?’”

The cost of the divorce bill is also rising at a significant rate due to the fall in the value of the pound.

The UK is set to send £9.4 billion to the EU this year, which is £3 billion higher than the UK government had initially calculated.

Since the Brexit referendum in 2016, the exchange rate of the pound against other leading currencies has fallen significantly.

Back then, the pound was 1.22 to the Euro, but today it is 1.16.

The fee is paid in the European currency, so an extra three billion has been added on.

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