Brexit: European interest rates rise may push up UK’s divorce bill by £5bn

New Treasury estimate comes as European Central Bank increases interest rates for first time in 11 years

Increasing interest rates in Europe could push up the UK's Brexit divorce bill by 5bn, the government's Treasury office has said.

The new estimate comes as the European Central Bank increased its interest rates for the first time in 11 years by 0.5 percentage points, ahead of the 0.25 percentage points expected by economists.