Brexit ‘to cost UK households £6,400’ according to London School of Economics

A British exit from the EU would wipe as much as £6,400 (€8,144) from average household incomes in the UK as trade deals sour, according to research by the London School of Economics.

“We consistently find by reducing trade, Brexit would lower UK living standards,” wrote Swati Dhingra, Gianmarco Ottaviano, Thomas Sampson, and John Van Reenen at the LSE’s Centre for Economic Performance.

“The fall in income per capita resulting from lower trade more than offsets any savings that the UK obtains from reduced fiscal contributions to the EU budget,” they said.

The June 23 poll has sparked a tense UK political debate, with champions of the EU pointing out that the bloc is the UK’s largest export market and eurosceptics saying Britain should claw back sovereignty.

While polls suggest the outcome is too close to call, bookmaker William Hill said the odds on an exit had shortened, indicating that outcome is becoming more likely.

The study’s baseline estimates imply the effect of quitting the EU would be equivalent to a decline in average household income of between £850 and £1,700 per year.

A more pessimistic scenario envisages effects on productivity growth and results in a reduction to national income of £4,200 to £6,400 per household.

On Thursday, Bank of England officials said uncertainty stemming from the referendum may hold back economic growth.

In a sign of how fierce the debate has become, Brexit campaigners were quick to criticise the CEP report, saying the LSE receives funding from the European Commission.

You can read the full report HERE.