Indeed, it is (Picture: Jack Taylor/Getty Images)

Leaving the EU could cost Britain a whopping £70 billion a year.

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Or at least that is the theory put forward by the Institute of Fiscal Studies, which has calculated the cost of leaving the single market.

Not being a member (which is a possible scenario) could see the UK lose out on an additional 4% of GDP by 2030, the IFS has said.

That 4% is equivalent of two years worth of growth, and equates to around £70 billion in today’s money – or £2,900 for each household.


It said that loss would outweigh the benefit of no longer paying in a net £9bn a year into the European Union budget.



The gloomy forecast comes after senior European politicians made it clear Britain can’t keep its membership of the single market unless its makes sizeable contribution to the EU budget and allows the free movement of EU workers.

Philip Hammond has spoken about the important of the single market to financial services (Picture: Alamy)

Chancellor Philip Hammond said last month that Britain could come out of the single market as a result of the June 23 vote, but said it must ensure access for the financial services industry.

The IFS said free trade agreements are designed to tackle trade tariffs but EU single market memberships aims to dismantle all non-tariff barriers as well, such as licensing.

This meant it was much much more valuable to the UK’s exporters, it said.

The cost/benefit of EU membership (£m) Gross figure leaving EU expected to cost £70,000 Gross figure we pay as EU member £9,000 Share

(Predictions: IFS)

If its estimations ring true then it highlights the importance of single market maintaining access to the economy.

Research associate Ian Mitchell, who is author of the report said: ‘From an economic point of view we still face some very big choices indeed in terms of our future relationship with the EU.’

Before the referendum leave campaigners suggested that Britain could retain single membership of the single market from outside the EU.

But the analyst said: ‘There is all the difference in the world between ‘access to’ and ‘membership of’ the single market.

‘Membership is likely to offer significant economic benefits particularly for trade in services.

‘But outside the EU, single market membership also comes at the cost of accepting future regulations designed in the EU without UK input.

‘This may be seriously problematic for some parts of the financial services sector. Choices in these domains will most likely be far more important than any deal on budget contributions.’

The IFS estimate is based on long-term estimates from other forecasting organisation such as the London School of Economic’s Centre for Economic Performance.

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