EU Referendum

Reality Check: Would Brexit cost your family £850 a year?

leaflet from BSIE Image copyright BSIE

A leaflet being sent out by Britain Stronger in Europe says: "Jobs at risk, higher prices and your family worse off by at least £850 a year if we leave Europe." Is that figure true?

The £850 per household figure is the optimistic end of a forecast from the well-respected Centre for Economic Performance (CEP) at the London School of Economics.

The CEP is predicting a 1.3% to 2.6% fall in GDP, which is the value of everything produced in the economy, currently about £1.8tn a year. Take 1.3% of that and divide by the 27 million households in the UK and you have your answer.

That's not the same as saying it would cost every household £850. Falling GDP would be expected to cut household incomes, but not pound for pound, so you would expect an £850 drop in GDP per household to lead to a fall in household incomes of somewhat less than £850. But to be fair, the leaflet has taken the optimistic end of the CEP forecast.

Also, bear in mind that this figure comes from economic forecasting, which means that the economists involved have had to make various assumptions about what would happen if the UK were to leave the European Union. They might be right, but they might not.

You can read more about the perils of economic modelling here.

Reality Check verdict: The £850 figure confuses GDP per household with household income, and is based on economic modelling so needs to be taken with a pinch of salt.


Read more: The facts behind claims in the EU debate


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