The UK's Brexit divorce bill could soar to £42.5bn after the Treasury increased its estimates by £5bn
Simon Clarke, the Chief Secretary to the Treasury, blamed rising interest rates affecting EU pension obligations for the increasing cost on Thursday.
"The primary drivers are the latest discount rates and inflation assumptions, which are centrally set by the Government for valuing long-term liabilities," he added. "The true cost of the settlement is confirmed when payments are made, based on the value at the time. The Treasury continues to monitor and verify these payments in line with the negotiated agreement."
The EU argued it was forced to act because the UK has been unwilling to take part in "meaningful discussion" over the protocol since February.
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