Brexit can cause serious shock to U.K. economy: study

'Potentially costing it 100 billion pounds and nearly one million jobs'

Updated - December 04, 2021 11:03 pm IST

Published - March 21, 2016 05:46 pm IST - LONDON:

Britain’s exit from the European Union could cause a “serious shock” to the country’s economy, potentially costing it 100 billion pounds and nearly one million jobs, a business report has warned.

According to the report commissioned by the Confederation of British Industry (CBI), the exit could cost the U.K. economy 100 billion pounds — the equivalent of 5 per cent of GDP — by 2020 and would lead to long-lasting economic damage from which it would never recover.

‘Joblessness rate may change drastically’

Household incomes could be between 2,100 pounds and 3,700 pounds lower if Britain voted to leave the EU, while the U.K.’s unemployment rate, currently one of the lowest in the EU at 5.1 per cent, would be between 2 and 3 percentage points higher, with 9,50,000 jobs potentially lost, said the report conducted by accountancy firm PricewaterhouseCoopers (PwC).

“This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth. The savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment,” said Carolyn Fairbairn, director general of CBI.

“Even in the best case this would cause a serious shock to the UK economy,” Ms. Fairbairn was quoted as saying by The Guardian .

Brexit campaigners angry at report

The report angered Brexit campaigners, who believe the government is trying to scare voters into supporting Britain remaining in the EU.

“Even in the CBI’s skewed choice of scenarios for exit, they are forced to admit that employment and the economy will continue to grow after we Vote Leave,” said Matthew Elliott, chief executive of Vote Leave, which campaigns in favour of an exit.

‘Spreading scare stories’

“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. They were wrong then and they are wrong now,” Mr. Elliott said.

Britain will vote on June 23 in a referendum on whether to remain in the EU, a 28-member country bloc.

“If we want to take back control and strike the kind of free-trade deal the CBI refuses to even consider, the only safe option is to Vote Leave,” Mr. Elliott said.

80 p.c. of survey members not for Brexit

The report has come after a recent poll found that 80 per cent of members questioned in a survey wanted to remain in the EU.

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