Brexit could cost UK economy up to £100bn and 950,000 jobs, says CBI

Leaving the European Union could cost the UK economy up to £100bn and around 950,000 jobs, according to a report from PwC commissioned by the Confederation of British Industry.

The report - the findings of which come a week after a survey found that four out of five CBI members wanted to remain in the EU - looked into two different scenarios, one more optimistic and the other less so.

It pointed to an ‘FTA scenario’, in which the UK negotiates a Free Trade Agreement with the EU. In this scenario, both this and other aspects of post-exit uncertainty are resolved by 2021.

The other is a ‘WTO scenario’ in which negotiations on post-exit arrangements prove more difficult and prolonged, and trade between the UK and the EU defaults to being conducted under World Trade Organisation rules.

The report said total UK GDP in 2020 could be between 3% and 5.5% lower under the FTA and WTO scenarios, respectively, than if the UK remains in the EU.

The WTA scenario could see the loss of up to 950,000 jobs by 2020, with 550,000 lost under an FTA scenario.

The UK unemployment rate is expected to rise in both cases, peaking in 2020 at about 7% in the FTA scenario and 8% in the other.

In addition, the report estimated that GDP per household could be around £2,100-3,700 lower in 2020 if the UK leaves the EU.

Carolyn Fairbairn, director general of the CBI, 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.