London: Britain's exit from the European Union could cause a "serious shock" to the world's fifth largest economy, potentially costing it 100 billion pounds and nearly one million jobs, a business report has warned.
According to the report commissioned by the Confederation of British Industry (CBI), the exit could cost the UK economy 100 billion pounds the equivalent of 5 per cent of GDP by 2020 and would lead to long-lasting economic damage from which it would never recover.
Household incomes could be between 2,100 pounds and 3,700 pounds lower if Britain voted to leave the EU, while the UK's unemployment rate, currently one of the lowest in the EU at 5. 1 percent, would be between 2 and 3 percentage points higher, with 950,000 jobs potentially lost, said an analysis conducted by accountancy firm PricewaterhouseCooper (PwC).
"This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth. The savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment," said Carolyn Fairbairn, director general of CBI.
"Even in the best case this would cause a serious shock to the UK economy," Fairbairn was quoted as saying by 'The Guardian'.
With a USD 3 trillion GDP, Britain is the world's fifth largest and Europe's second largest economy.
The report angered Brexit campaigners, who believe the government is trying to scare voters into supporting Britain remaining in the EU.
"Even in the CBI's skewed choice of scenarios for exit, they are forced to admit that employment and the economy will continue to grow after we Vote Leave," said Matthew Elliott, chief executive of Vote Leave, which campaigns in favour of an exit.
"The EU funded CBI are desperate to recreate the same scare stories they spread when they urged Britain to scrap the pound and join the euro. They were wrong then and they are wrong now," Elliott said.
Britain will vote on June 23 in a referendum on whether to remain in EU, a 28-member country bloc.
"If we want to take back control and strike the kind of free-trade deal the CBI refuses to even consider, the only safe option is to Vote Leave," Elliott said.
The report comes after a recent poll of companies by the CBI found that nearly 80 per cent of the member firms think remaining in the European Union will be best for their businesses.