By Joe Mellor, Deputy Editor
A recent report for PWC (PricewaterhouseCoopers) for the CBI claims that the economy faces serious damage if the UK opts for Brexit.
If the UK moved out of the EU it would shock the UK economy, which could see up to 950,000 job losses and make the average household £3,700 worse of by 2020, the report warns.
The analysis by PWC also said Leaving the EU could cost the UK economy £100bn (equivalent of 5% of GDP) by 2020. This would cause long-term damage from which it would never recover.
The UK’s unemployment rate, currently one of the lowest in the EU at just 5.1%, would rise between 2 and 3 per cent.
Carolyn Fairbairn, the CBI’s director general, said: “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. Even in the best case this would cause a serious shock to the UK economy.
“The economy would slowly recover over time, but never quite track back to where it would have been. Leaving the EU would mean a smaller economy in 2030.”
The analysis comes as former prime minister Sir John Major stepped into the debate and warned Britain faced a momentous decision in 23 June referendum, and urged voters to vote to stay in the EU.
He said: “This vote will be momentous. It will decide Britain’s place in the world for generations to come,” he said, before concluding: “It will be a fateful choice: Great Britain or Little Britain.”
However, Pro-Brexit groups are furious at the report. Matthew Elliott, chief executive of Vote Leave, said: “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.
“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. 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.”