Report warns of serious blow to UK economy from vote for Brexit

An EU exit could deliver a serious blow to the UK economy causing 950,000 job losses and leave the average household £3,700 worse off by 2020, according to a report commissioned by the Confederation of British Industry (CBI) business lobby group.

Issuing a grim warning, an analysis conducted by accountancy firm PricewaterhouseCoopers for the CBI said that Brexit could cost the UK economy £100 billion – the equivalent of 5 per cent of GDP – by 2020 and wreak long-lasting economic damage from which it would never recover.

In the event the UK voted to leave, household incomes could be between £2,100 and £3,700 lower, while the UK's unemployment rate, currently one of the lowest in the EU at 5.1 per cent, would be between 2 and 3 percentage points higher, with 950,000 jobs potentially lost.

Carolyn Fairbairn, the CBI's director general, said, ''This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth, hitc.com reported. 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 CBI, which had said it would push the economic case for the UK to remain in the EU, had been criticised by anti-EU campaigners who said the business community was split on the issue.

Prime minister David Cameron's speech at a CBI conference in November was interrupted by hecklers, when they unfurled a banner reading "CBI - Voice of Brussels".

Britons would vote in an in-out referendum on 23 June and were more equally divided than business, with opinion polls showing about 40 per cent on either side and about 20 per cent undecided.

The director general of another employers group, the British Chamber of Commerce, resigned this month after going public with his anti-EU views, in a breach of the neutral stance adopted by his organisation.