The first group of economists to come out in support of the UK leaving the European Union claim that the move would mean a 4 per cent boost to UK GDP.
The “Economists for Brexit” group say that claims by the Organisation for Economic Co-operation and Development that Brexit will cost UK households and hamper UK growth are false.
In the event of Brexit, the removal of EU trade barriers will mean consumer prices will fall by about 8 per cent, says Patrick Minford, professor of applied economics at Cardiff University and a former adviser to Margaret Thatcher, and a member of the pro-Brexit group.
“Our analysis shows that walking away from the EU, not negotiating a new agreement with the EU while getting rid of EU trade barriers, will bring about a 4 per cent of GDP gain to the economy, consumer prices will fall about 8 per cent, and our hugely competitive services sector will take the place of diminishing manufacturing output,” he says.
“A lot of economic nonsense has been talked so far in the Brexit debate,” the report states.
The economists argue that the EU artificially inflates prices of agricultural and manufacturing goods, leading to higher costs for UK households that would fall in a Brexit scenario.
“The EU is a customs union. When you’re taught economics at university, apart from high unemployment and high inflation the next evil down the list is a customs union … it discriminates against consumers and protects those areas behind the tariff,” the report states.
Leaving the EU would result in a 1.5 per cent rise in disposable incomes in the UK, the report claims.
Gerard Lyons, a former chief economist at Standard Chartered and a member of the group, says that staying in the EU would also represent a threat to financial services and the City.
The group of eight economists also includes Roger Bootle, founder of Capital Economics.
However, the back and forth about the EU referendum has not dampened consumer confidence in the UK, data from YouGov and Centre for Economics and Business Research Consumer Confidence Index show.
Consumer confidence in the UK has reached a near two-year high, rising to 115.2 in April, close to the recent high in March 2014 of 115.4.
“Despite concerns over Brexit, the global market wobbles and business failures such as BHS, consumers are still feeling optimistic,” says Scott Corfe, director at the Centre for Economics and Business Research.