31 March 2016

  |  CBI Updates Team


Economic impact of Brexit

The CBI has released new independent research showing that ‘Brexit’ could cost the UK economy £100 billion and 950,000 jobs by 2020.   

The CBI/PwC analysis was delivered as part of a major lecture by Carolyn Fairbairn at the London Business School entitled Brexit: the business view. Carolyn warned that leaving the EU could mean the return of significant barriers to trade and that none of the alternative options offer the same access to and influence over the EU single market as full EU membership.

Click here to watch the lecture and read the speech

The analysis modelled two different scenarios for a Brexit. First, a highly optimistic ‘Free Trade Agreement scenario’ - where the UK signs a quick trade deal with the EU, keeps all its existing trade deals with third party countries and signs a rapid trade deal with the United States. Secondly, a less optimistic mid-range  ‘World Trade Organisation scenario’ – where the UK trades under WTO rules but is able to renegotiate trade deals with third party countries over the coming years.

Click here to read the research in full  

Under both scenarios, leaving the EU creates a serious economic shock to the UK economy, meaning GDP would still be lower 15 years later. In the mid-range WTO scenario, UK GDP could be as much as £100bn - about 5% - lower by 2020, 950,000 jobs would be lost and GDP per household £3,700 lower.

In the past few weeks, analysis from Oxford Economics and the London School of Economics have similarly predicted negative economic impacts from leaving the EU. The CBI’s new research follows its confirmation that it will continue to make the economic case to remain in the EU after reaffirming a strong member mandate, where 80% of CBI members said being in the EU is best for their business.

Click here to read the membership survey

Separately, the findings of the latest CBI/PwC Financial Services Survey warned that the prospect of Brexit was part of a “perfect storm” currently buffeting the sector.

Click here for the CBI/PwC Financial Services Survey

If you have any questions about what the EU referendum means for your business, please contact EUref@cbi.org.uk