The £50bn Brexit bill isn’t such a terrible deal – especially if we pay via QE.

‘A slight drop in sterling [as a result of quantitative easing]
seems far more preferable to taking money out of the real economy.’
Photograph: David Levenson/Alamy

Against the £435bn Britain already owes itself as a result of printing money, a sum this size shouldn’t be an issue – but the government has made it one.

The UK government’s crack negotiating team, after much bluster, has finally agreed to pay our EU “divorce bill”. It was never in doubt, really. The hard talk has always failed to comprehend that you can’t “just walk away” from a contract you’ve already signed.

Sums such as £50bn sound huge, but it’s always a good idea to look at big-sounding numbers in context. For a whole economy to spend as a one-off capital investment in order to preserve access to some key international institutions, it isn’t such a terrible deal. Over 10 years, that’s just 0.25% of GDP per year, which is significantly less than the potential impact a badly negotiated Brexit deal would have on the economy.

By Phil McDuff.

Full story at The Guardian.