Nine out of 10 of the country’s top economists working across academia, the City, industry, small businesses and the public sector believe the British economy will be harmed by Brexit, according to the biggest survey of its kind ever conducted.
A poll commissioned for the Observer and carried out by Ipsos MORI, which drew responses from more than 600 economists, found 88% saying an exit from the EU and the single market would most likely damage Britain’s growth prospects over the next five years.
A striking 82% of the economists who responded thought there would probably be a negative impact on household incomes over the next five years in the event of a Leave vote, with 61% thinking unemployment would rise.
Those surveyed were members of the profession’s most respected representative bodies, the Royal Economic Society and the Society of Business Economists, and all who replied did so voluntarily.
Paul Johnson, director of the independent Institute for Fiscal Studies, said the findings, from a survey unprecedented in its scale, showed an extraordinary level of unity. “For a profession known to agree about little, it is pretty remarkable to see this degree of consensus about anything,” Johnson said. “It no doubt reflects the level of agreement among many economists about the benefits of free trade and the costs of uncertainty for economic growth.”
The poll also found a majority of respondents – 57% – held the view that a vote for Brexit on 23 June would blow a hole in economic growth, cutting GDP by more than 3% over the next five years. Just 5% thought that there would probably be a positive impact.
The economists were also overwhelmingly pessimistic about the long-term economic impact of leaving the EU and the single market. Some 72% said that a vote to leave would most likely have a negative impact on growth for 10-20 years.
Just 4% of respondents who thought Brexit would mostly likely have a negative impact on GDP over the initial five years said it would have a positive effect over the longer term.
The findings – which come as 37 faith leaders write in a letter to the Observer warning that Brexit will damage the causes of peace and the fight against poverty – will bolster David Cameron and George Osborne, who have both argued strongly that the economy will be hit hard in the event of Brexit.
But the prime minister and chancellor have been criticised by the Michael Gove and Boris Johnson-led Leave campaign, which has claimed they are trying to scare the electorate and are buying into the establishment views of EU-funded international organisations. Last week Vote Leave accused the Institute for Fiscal Studies of being a “paid-up propaganda arm” of the European Union after it said that leaving the EU would result in an extra two years of austerity.
The main reasons cited by economists as to why the UK would suffer were “loss of access to the single market” (67%) and “increased uncertainty leading to reduced investment” (66%). The leading Leave campaigner Michael Gove has said Britain should leave the single market as well as the EU.
Economists working in the public sector tended to be slightly less negative about the economic impacts of leaving the EU than average. Non-UK citizens living in the UK were more likely to think a vote to leave would most likely have a negative impact on GDP over five years (96%) compared with British or Irish economists living in the UK (86%). By contrast, relatively few economists have publicly come out saying that leaving the EU would be good for British growth, and only a handful have signed up in support of the pro-Brexit group Economists for Britain.
Most studies of the impact on Britain’s economy of a decision to quit the EU show the uncertainty will hit growth in the short term and the loss of access to the EU’s single market will damage growth for decades to come.
The International Monetary Fund (IMF), the Organisation for Economic Cooperation and Development and the UK’s National Institute of Economic and Social Research agree that there will be a loss of output as foreign investment shrivels and international businesses and banks shift work to the continent. Any cuts to migration would also have a huge impact on growth.
The Treasury, which has predicted Brexit would cost each household £4,300 by 2030 in lost output and extra taxes, has gone further with warnings that house prices will tumble and pensions values collapse by £300bn.
Economists for Brexit, who base their forecasts on a model developed by the Cardiff University professor and arch-monetarist Patrick Minford, argue that a fall in sterling, a bonfire of labour protections and the abolition of import tariffs will boost trade after a brief period of uncertainty. The free market group has said job losses in areas of the economy protected by the EU, such as agriculture and manufacturing, will be more than made up for by a booming services sector.
Analysis released by the IFS last week showed that leaving the EU in the vote on 23 June would lead to a £40bn hole in the public finances.
The Stronger In campaign fronted by Cameron said this would lead to spending cuts of at least £15.9bn to the NHS – equivalent to 200,000 doctors, 487,000 nurses or 37 hospitals. It would also mean £7.6bn of cuts to education, equivalent to 395,000 teachers, 393 new schools, or 2.8 million primary school places.
In total, 639 respondents completed an online survey, sent to non-student members of the Royal Economic Society and the Society of Business Economists, between 19 and 27 May 2016: a response rate of 17%. Data is unweighted and reported figures should only be taken as representative of the views of those who responded
