NIESR: Brexit would cause "significant shock" to UK economy

In the longer run, NIESR predicts that a Brexit would lower GDP by between 1.5% and 7.8% in 2030, compared to a 'remain' vote.

NIESR also expects Sterling to depreciate in the longer-run, to close to parity with the euro by 2030.

The weaker pound would also lead to higher import prices and therefore higher prices faced by households, according to the data, which shows that lower prices for our exports, coupled with higher import prices, leads to a persistent deterioration in the terms of trade.

By 2030, consumption is projected to fall by between 2.4% and 9.2% compared with a world in which the UK remained in the EU. This would translate into declines in annual consumption per capita of between £500 and £2,000 (at 2012 prices) by 2030.

In its research, NIESR said:

"A decision to leave the EU would represent a significant shock to the UK economy. Others, such as the reductions in trade and foreign direct investment, would represent more permanent structural changes to the UK economy, and so would have important long-run implications.

"In the short run, the current heightened levels of uncertainty are likely to persist, if not intensify, as the UK establishes its place outside the EU. Financial markets are already pricing in a period of currency volatility around the referendum. It would also seem reasonable to expect an increase in credit premia across the economy, raising the cost of borrowing for the government, businesses and households."