Brexit would 'almost certainly' harm UK's economy, say economic trio
Three leading British economists have warned that leaving the EU would 'almost certainly' damage the UK's economic prospects.
Britons would be worse off financially if the UK opted to leave the EU, according to 'reputable' resaearch | Photo credit: Press Association
The trio, Jagjit Chadha, the director of the National Institute of Economic and Social Research, Paul Johnson, the director of the Institute for Fiscal Studies and John Van Reenen, the director of the Centre for Economic Performance at the London School of Economics, published a joint statement today (20 June), outlining their collective conclusions on the likely consequences of a Brexit.
Leaving the EU, they argue, would, relative to staying in, likely result in lower real wages, a reduction in the value of the pound resulting in price hikes, as well as higher borrowing and lower public spending or higher taxes. The UK would also see unemployment rise in the short term.
The three economists added that their conviction that British citizens would be worse off financially if the UK opted to leave the EU, wasn't just based on research from their own institutes, "but the work of almost all those who have looked seriously at this issue".
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"In our lifetimes we have never seen such a degree of unanimity among economists on a major policy issue", they said, with Van Reenen adding that, "virtually all the economic work of which we are aware tells the same story - there really is no serious doubt that leaving would be taking a big risk with the [UK's] economy."
And although there were also non-economic factors surrounding the referendum campaign, such as increased national sovereignty and potentially stronger curbs on immigration, the trio warned that voters would need to make a judgement call on whether these issues were worth the potential economic cost.
"That judgement should be informed by the fact that our research, and that of every reputable economic research organisation, suggests that leaving the EU would almost certainly harm our economic prospects."
Van Reenen added that analysis by the CEP and NIESR suggests that the UK economy, "would do worse outside the EU than in it" shrinking by around one to three per cent by 2020 and between two and eight per cent by 2020.
Chadha said a UK exit would in the short term, "increase uncertainty and at best reduce growth. In the long run more costly trade and less foreign investment would hold growth back".
Johnson, meanwhile, warned that the likely drop in growth would see the UK's public finances "suffer", adding, "That would mean higher borrowing in the short term and higher taxes or lower spending in the long-term."