A UK exit from the EU would cause a “serious economic shock”, potentially costing the country £100bn and nearly one million jobs, according to a report commissioned by the CBI.
The business lobby group said a study found that a vote to leave would have “negative echoes” lasting many years.
It said the cost could be as much as 5% of GDP and 950,000 jobs by 2020.
But Vote Leave chief executive Matthew Elliott said employment and the economy would continue to grow after an exit.
He said that “even in the CBI’s skewed choice of scenarios for exit” it was “forced to admit” that would happen.
CBI director general Carolyn Fairbairn said an EU exit “would be a real blow for living standards, jobs and growth”.
She said: “The savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment.
“Even in the best case this would cause a serious shock to the UK economy.”
For the CBI, accountancy firm PwC examined what would happen if Britain signed a free trade agreement with the EU, or decided to conduct business as a member of the World Trade Organisation, in the event of the UK voting to leave in the referendum on 23 June.
The firm forecast that if Britain voted to stay in the EU, the average annual GDP growth between 2016 and 2020 would be 2.3%.
This compares with 1.5% economic expansion under a Free Trade Agreement (FTA) and 0.9% if the UK struck a deal as a WTO member, PwC said.
However, Mr Elliott said that average annual economic growth in both exit scenarios between 2020 and 2030 would equal – and in some cases beat – GDP forecasts for the UK remaining in the EU.
If the UK remained in, PwC said GDP was forecast to expand on average by 2.3% between 2021 and 2025 and between 2026 and 2030.
In a free trade scenario, PwC said average annual growth would be 2.7% between 2021 and 2025, and an average of 2.3% in the years to 2030.
In a WTO agreement, average annual GDP growth would be 2.6% between 2021 and 2025 and 2.4% up to 2030, forecast PwC.
Average annual GDP growth forecasts
By 2020, PwC said it expected employment to reach 32.2 million but it could fall by 550,000 in the free trade scenario and by 950,000 in a WTO agreement.
Vote Leave said that jobs …read more
Source:: BBC UK