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Brexit Briefing: How Much Will the UK Have to Pay?

Brexit Briefing: How Much Will the UK Have to Pay?

Talking Points

- The bill the UK will have to pay to leave the EU will be in focus when the two start negotiating Brexit terms.

- Although Brexit will be formally triggered tomorrow, discussions are unlikely to start until June.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

Tomorrow, Wednesday, UK Prime Minister Theresa May will write the formal letter to Donald Tusk, the President of the European Commission, triggering Article 50 of the Lisbon Treaty. That will fire the starting gun on the Brexit negotiations between the UK and the EU that will lead up to a divorce on or before March 29, 2019.

However, those negotiations are not expected to even start until June. The European Council – made up of representatives of EU member states – will next meet on April 6 but that is seen as too early for a formal response and the meeting after is not until the end of May, following which discussions are expected to begin.

In focus then will be the so-called Brexit bill the UK might have to pay to leave and it could be one of the most contentious items on the agenda. Austrian Chancellor Christian Kern has been quoted as saying that “the check should be around €60 billion. That’s what the European Commission has calculated and this will be part of the negotiations.” European Commission chief negotiator Michel Barnier has been quoted as saying he would demand £48 billion, or around €55 billion.

By contrast David Davis, the UK Secretary of State for Exiting the EU, has said the UK will pay “nothing like” the tens of billions mentioned, has added that he has seen “no explanation” for the figures quoted and has suggested the UK might pay nothing.

Inevitably, the final sum will be determined by the politicians rather thanthe accountants. However, Bruegel, the Brussels-based economic think tank, has been looking at the figures and in particular at how the UK should be able to claim a share of the EU’s assets to partially offset its liabilities.

“To sum up, from the EU’s €154 billion assets there are €41 billion (mainly cash, property and certain financial assets) which can be considered as a kind of ‘accumulated wealth’. A share of this could be allocated to the UK upon Brexit,” it concludes. Those figures are far smaller than the EU’s liabilities, which have been estimated at well over €300 billion, but would reduce the UK’s final bill considerably.

What this means for the markets is far from clear but once the negotiations start in June both the Euro and the Pound are certain to be buffeted by the various figures that will be quoted by the two negotiating teams.


Index / Exchange RateChange (Exchange Hours/GMT Session Rollover)Market Close/Last
FTSE 100+0.06%7,298

Upcoming UK/EU Event Risk

EventsDate, Time (GMT)ForecastPrevious
German Import Price Index (MoM) (Feb)Mar 29, 06000.4%0.9%
German Import Price Index (YoY) (Feb)Mar 29, 06007.0%6.0%
UK Net Consumer Credit (Feb)Mar 29, 08301.3b1.4b
UK Net Lending Sec. on Dwellings (Feb)Mar 29, 08303.5b3.4b
UK Mortgage Approvals (Feb)Mar 29, 083069.5k69.9k
UK M4 Money Supply (MoM) (Feb)Mar 29, 08000.9%
UK M4 Money Supply (YoY) (Feb)Mar 29, 08007.0%
UK M4 ex IOFCs 3M Annualized (Feb)Mar 29, 08001.6%1.8%

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at

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