The UK will save no money from leaving the European Union over the next five years and could be paying its Brexit divorce bill until at least 2064, according to the government’s independent budget watchdog.

Outlining the cost of severing links with the EU, the Office for Budget Responsibility said government spending up until 2023 would have been the same if the UK had voted to remain in the 2016 referendum.



On the current course assumed by the OBR, the financial settlement required to leave the EU and spending to replace European funding in the UK will cost the country just as much as full membership.



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The latest estimate for the cost of settling the UK’s debts with Brussels comes after Theresa May agreed to a financial settlement in December so that talks could move on to the country’s future trading relationship. The OBR, in documents released alongside the chancellor’s spring statement, said it expected the total settlement would be about £37.1bn, which is in line with the sum previously quoted by the prime minister of between £35bn and £39bn.



However, the independent economic forecaster also revealed payments could be made to Brussels until at least 2064, a period after leaving the EU next year equal to the entire duration of Britain’s membership since the mid-1970s. The payments mainly relate to the country’s share of €76.7bn (£68bn) in EU pensions scheme liabilities.



Although the prospect of long-term payments to Brussels is likely to infuriate hardline Tory Brexiters, the OBR said the costs were front-loaded so the bulk of payments would be made over the next few years. The payments are likely to peak at about £10bn in 2020 before falling sharply and amounting to less than £300m in every year after 2027.



The budget watchdog said it was important not to view these costs in isolation as there were likely to be much bigger consequences from leaving the EU. It said lower migration, sluggish productivity growth and an economic slowdown – as well as higher inflation due to the fall in the pound – would lead government borrowing to increase by about £15bn a year by 2023.

