As U.K. Finance Minister Philip Hammond prepares to deliver a key update to the country's budget, there are expectations that it will not include a mention of the so-called "Brexit bill" that the U.K. will have to pay to exit the European Union (EU), an economist told CNBC Wednesday.
Known in the U.K. as the Autumn Budget, Hammond will outline on Wednesday how and where the U.K. government will be spending in the next year, as well as projecting borrowing and deficit figures over the next years.
One expected expense in the near future is the financial contribution to the EU before the U.K. leaves the bloc. The Brexit bill aims to guarantee that there will be no loopholes in the EU budget once the U.K. – a net contributor – leaves the Union.
But Sam Hill, a senior U.K. economist at RBC Capital Markets told CNBC it was "highly unlikely" that there will be reference to the Brexit bill in the budget on Wednesday. He believes that the Office for Budget Responsibility (OBR), which prepares the economic forecasts that the finance minister uses as a basis for his budget plans, will not include any Brexit bill until the negotiations have ended.
"I think the OBR won't make a decision on that until (Brexit) is all signed off," he added.
So far the British and EU negotiating teams have not yet reached an agreement over how much the U.K. owes the EU. However, recent media reports suggest that the U.K. is prepared to increase its offer and pay 40 billion euros ($ 47 billion) to leave the bloc – though that sum is yet below from the original 60 billion euro figure that the EU had said the UK owed.
According to a report in the Financial Times on Wednesday, negotiators are trying to reach a deal over the Brexit bill within three weeks – to ensure that by mid-December, European leaders can give the greenlight to proceed to trade talks.