View the article online at http://citywire.co.uk/money/article/a892778
Brexit could cost UK £100bn and one million jobs, CBI warns
Confederation of British Industry has warned a UK exit from Europe could cause major disruption to the British economy.
The Confederation of British Industry (CBI) has warned a UK exit from Europe could cause major disruption to the UK economy.
According to research commissioned by the business group, a so-called ‘Brexit’ may cost the UK £100 billion and result in the loss of 950,000 jobs by 2020.
The study said the ‘serious shock’ of this is unlikely to be countered by the renegotiation of UK trade deals with its former European partners.
‘This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth," CBI director-general Carolyn Fairbairn said in a statement.
‘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 report clashes with the views of Brexit supporters, who include Peter Hargreaves. Last Friday the founder of funds supermarket Hargreaves Lansdown claimed an ‘out’ vote would be an 'absolute fillip' for the UK.
'I’m firmly convinced, that day – hopefully – we decide to leave, that little bit of insecurity, that little bit of unknown will be an absolute fillip to everyone,’ Hargreaves said on BBC Radio 4's Today programme.
A report by Capital Economics commissioned by Neil Woodford concluded a British exit from the European Union would have no long-term consequences and was a 'nil sum game' in the words of the fund manager.
However, investment group BlackRock, and others, have stressed the risk and uncertainty that Brexit would cause for the UK economy.
The CBI commissioned PwC to look at two scenarios in the event of a Brexit. The first examined the outcomes of a swift free-trade agreement with Europe, while the second looked at what would happen if negotiations were prolonged.
In both cases it was concluded there would be lots of uncertainty in the short-term, resulting in firms postponing hiring a strategic investment decisions.
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