As the debate over Britain’s future rages on amongst politicians, the public and even business leaders, it’s becoming ever more difficult to establish any actual facts. Nevertheless, opinions continue to flood in from all corners of these nations and now we have had word from no greater authority than the Confederation of British Industry. They have commissioned a forecast which sounds a dangerous note for those hoping the UK will leave the EU.
The forecast, compiled for the CBI by the accountancy firm PwC is due to be outlined by the director general of the CBI at the London Business School. Carolyn Fairbairn will announce that the study, which predicts a post-Brexit economy, shows that the UK’s GDP could be 5.5% smaller than it is now by 2010.
That’s around £100 billion less per year into the Government’s coffers, a number which was reached with the assumption that the UK could not quickly establish favourable free-trade deals with the EU. In comparison, they suggest that voting to remain in will see the economy continue to grow at a steady 2.3% year on year. This shortfall would equate to around £3,700 lost for every household.
The report also suggests that unemployment would rise to 8% over the next couple of years, with the loss of around 950,000 jobs. For industries already struggling, like manufacturing, that would spell disaster.
Ms Fairbairn will suggest that this analysis “very clearly” shows that a Brexit scenario would be a “real blow for living standards, jobs and growth”. Adding: “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.”
This report will be the last major intervention on behalf of the CBI in the referendum campaign, who have been accused by the Leave camp of misrepresenting the views of businesses. Though Leave have a right to be disgruntled, a study of 773 CBI members released earlier this month showed 80% support for staying in the EU, with only 5% saying that it would be in their firm’s best interests to leave.
Also in the report is a “best case” scenario, where the UK rapidly lands free-trade deals with the EU. However, they still suggest we’d see a 3% fall in the UK’s GDP, equating to a loss of around £2,100 per household. Though the adverse economic impact would fade, the UK’s economy wouldn’t return to its EU levels before 2030, and would likely never make up for that lost 14 years.
Their report comes at critical time for the UK’s manufacturing economy, which recently saw its biggest drop since 2009. The CBI announced that the manufacturing output survey for March was -15, down sharply from the 0 seen in February. They do, however, suggest that things are about to start looking up for the industry, with output expectations for the next three months rising to +23, up from 11+.
Published by www.customfittings.com