Brexit to be costly for Britain: CBI survey

London, March 22 (IANS) Brexit would be more costly than remaining in the European Union (EU), according to a survey released Monday by the Confederation of British Industry (CBI).

The CBI representing businesses employing one third of the British workforce, commissioned professional services firm PricewaterhouseCoopers (PwC) to model two scenarios for Brexit after the referendum on June 23 on whether to stay in the EU or leave the bloc, Xinhua reported.

PwC said in its report there was more uncertainty outside the EU “particularly in terms of future trading relationships,” and that the two contrasting scenarios were intended to “capture this uncertainty.”

The optimistic scenario rested on Britain’s achieving a free trade agreement with the EU within five years, while the pessimistic scenario modelled the trade conducted under current World Trade Organisation (WTO) rules.

Under the optimistic scenario, Britain’s GDP would be three percent lower in 2020 than what it would be if there was no Brexit, a reduction of 55 billion pounds ($79 billion) at 2015 prices, while under the pessimistic scenario, the economy would be 5.5 percent smaller, a reduction of 100 billion pounds at 2015 prices.

In the longer term, the disruptive effects of an exit would lessen, with GDP forecast to be between 1.2 percent and 3.5 percent smaller under the optimistic and pessimistic scenarios respectively, a cost of between 25 billion pounds and 65 billion pounds.

Carolyn Fairbairn, director general of the CBI, said at the unveiling of the report at the London Business School, that savings from reduced EU budget contributions and regulation would be “greatly outweighed by the negative impact on trade and investment.”

She added: “Without a free trade deal, 90 percent of British exports to the EU, by value, could face tariffs. Some sectors could be hit particularly hard. Under WTO rules, British textile exports to the EU could face tariffs of nearly 10 percent. Transport equipment could face tariffs of about seven percent.”

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of www.mangalorean.com or any employee thereof. www.mangalorean.com is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of www.mangalorean.com to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at  info@mangalorean.com. Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here