The Guardian looks at what a British exit from the EU would change in terms of GDP, jobs, trade, and immigration. The picture is complicated, but the cons definitely outweigh the pros.
The broad economy
There have been a few attempts to quantify what an exit from the EU would do to the size of the UK economy, despite the obvious pitfalls of trying to put a figure on a hypothetical situation that has a number of variables – such as what sort of trade deals are negotiated post Brexit (more of that below). Given the range of potential post-Brexit circumstances there is a broad range of estimates. Some argue the economy will suffer permanent losses on the back of weaker trade and investment. Others say freedom from the rules, as well as the costs, that come with EU membership would make Britain more prosperous.
Starting with the estimates that leaving would be a net loss to the UK economy, one analysis often cited is from researchers at the National Institute of Economic and Social Research in 2004. They found an exit from the EU would permanently reduce UK GDP by 2.25%, mainly because of lower foreign direct investment. That estimate is now old and, as the thinktank’s current head, the world economy has changed considerably in the past decade.
Another analysis by economists at the Centre for Economic Performance (CEP), part of the London School of Economics, calculated the UK could suffer income falls of between 6.3% to 9.5% of GDP, similar to the loss resulting from the global financial crisis of 2008-09. That is under the researchers’ pessimistic scenario, in which the UK is not able to negotiate favourable trade terms. Under an optimistic scenario, in which the UK continues to have a free trade agreement (FTA) with the EU, losses would be 2.2% of GDP.