Leaving the European Union might cost the UK £100 billion ($145 billion) in lost economic output and 950,000 jobs by 2020, the Confederation of British Industry said as it stepped up its campaign against a so-called Brexit. An exit could, according to the study, meaning unemployment would be 2-3 percent higher by 2020 than if Britain remained in the EU.
A vote to leave the bloc in the referendum Prime Minister David Cameron has called for June 23 “would cause a serious shock to the U.K. economy,” Britain’s main business lobby group said, citing a study it commissioned from PricewaterhouseCoopers of two Brexit scenarios.
“Leaving the European Union would be a real blow for living standards, jobs and growth,” CBI Director-General Carolyn Fairbairn said in a speech in London, according to remarks released in advance by the lobby group. “The savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment.”
A so-called Brexit could cost about £100 billion (128 billion euros, $145 billion) of economic output by 2020 — equivalent to five percent of annual GDP — the research found.
“This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth,” said Carolyn Fairbairn. “Even in the best case this would cause a serious shock to the UK economy.”
According to the study, U.K. GDP might be 5 percent lower than it would otherwise be by 2020 in the case of withdrawal, though it might only be 3 percent lower if a free-trade deal is rapidly reached with the rump EU. Growth might be as low as zero in 2017 or 2018, the CBI said.
“The economy would slowly recover over time, but never quite tracks back to where it would have been,” Fairbairn will say. “Leaving the EU would mean a smaller economy in 2030.”
The CBI said last week it will campaign to keep the U.K. inside the EU after a survey found four-fifths of its members believe this would be best for their businesses.
Brexit campaigners argue Britain would be better off outside the bloc because Europe is a shrinking market for U.K. exports and the government would be able to conclude its own trade deals with fast-growing economies around the world. “The EU funded CBI are desperate to recreate the same scare stories they spread when they urged Britain to scrap the pound and join the euro,” Matthew Elliott, chief executive of Vote Leave, which is campaigning for an exit, said in a statement. “They were wrong then and they are wrong now.”
The research was undertaken by services firm PwC on behalf of business group the Confederation of British Industry.
Vote Leave, which campaigns in favour of an exit, dismissed the results, with chief executive Matthew Elliott telling the BBC the CBI’s scenarios were “skewed” and leaving the EU was the “only safe option”.
Britain is due to vote in a referendum on whether to remain a member of the 28-country bloc on June 23.
Opinion polls indicate the race is neck and neck with as many as 20 percent of voters still undecided, meaning the result is very much in the balance.
Brexit could cost UK 950,000 jobs by 2020, says CBI study