In today’s blog post we will examine the potential impact of a UK exit on the UK economy. As the nation moves closer and closer to the EU referendum on the 23rd of June many are still unsure how they will vote. The question, “Should the United Kingdom remain a member of the European Union or leave the European Union?” will be answered and will hold repercussions for generations. Those who want to leave the EU cite its costly membership, a lack of control over UK borders and what they see as increased power from Brussels as the main reasons for leaving the UK. However, those who believe the UK should remain a member believe that the trade benefits, the economic benefits of a strong workforce and that ‘going it alone’ are enough reasons to not leave.
However, what does a potential Brexit look like for the UK economy and what could be the consequences of doing so? The latest report conducted by PWC for the CBI claims that the UK economy would experience irreparable damage should the UK leave. The figures speak for themselves, a £100 billion loss by 2020 equating to a loss of 5% from the GDP with 950,000 jobs potentially lost. Household incomes could fall, on average, by £2,000 to £3,000 and the unemployment rate, currently the lowest in Europe, could rise from 5.% to 8%. Other organisations such as US investment banks JP Morgan and Citi have echoed the latest report which goes into greater detail than previous studies.
However, in a survey by Yougov which put the leave campaign 9 points clear of the remain campaign it appears that the public are increasingly, at the moment, drawn to the idea of a Brexit. There was a 25 point shift believed that leaving would reduce the risk of terrorism to the UK and a 4 point shift in those who felt that the UK would have increased global influence. However, voters were more inclined to agree that a Brexit would most likely have a negative impact on the British economy.
It is not just the UK economy that would feel the effects of a Brexit. Since the financial crisis of 2008 the U.K. economy has been a huge source of job creation as the EU has struggled to recover. Not only has the UK economy provided jobs for its own citizens but also for hundreds of thousands of others across the 28-member bloc.
Economists believe that this influx has helped British economic growth and, ironically, added to the fears over immigration that form a key part of the leave campaign’s arguments. Whilst a lot of the focus has been the impact on the UK leaving the IMF warned that an exit would have severe consequences for Europe and the rest of the world.
Ultimately as the debate hots up, both those in favour and against leaving the EU will be stepping up their campaigns to influence the public.
Regardless of the outcome of the referendum one thing is clear. That the vote will be a generation defining moment for Britain’s relationship with the EU.
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