<P> Supporters of withdrawal argued that ending net contributions to the EU would allow for tax cuts or government spending increases . On the basis of Treasury figures, in 2014 the United Kingdom's gross national contribution (ignoring the rebate) was £ 18.8 billion, about 1% of GDP, or £ 350 million a week . Because the UK receives (per capita) less EU spending than other member states, a rebate was negotiated; net of this rebate, the contribution was £ 14.4 billion, approximately 0.8% of GDP, or £ 275 million a week . If EU spending in Britain is also taken into account, the average net contribution for the next five years is estimated at about £ 8 billion a year, which is about 0.4% of national income, or £ 150 million per week . The Institute for Fiscal Studies noted that the majority of forecasts of the impact of Brexit on the UK economy indicated that the government would have less money to spend even if it no longer had to pay into the EU . </P> <P> According to Paul Krugman, Brexiteers' assertions that leaving the single market and customs union might increase UK exports to the rest of the world are wrong . He considers the costs of Brexit might be around 2 per cent of GDP . </P> <P> Most economists, including the UK Treasury, argue that being in the EU has a strong positive effect on trade and as a result the UK's trade would be worse off if it left the EU . Surveys of leading economists show overwhelming agreement that Brexit will likely reduce the UK's real per - capita income level . A 2017 survey of existing academic literature found "the research literature displays a broad consensus that in the long run Brexit will make the United Kingdom poorer because it will create new barriers to trade, foreign direct investment, and immigration . However, there is substantial uncertainty over how large the effect will be, with plausible estimates of the cost ranging between 1 and 10 percent of the UK's income per capita ." These estimates differ depending on whether the UK stays in the European Single Market (for instance, by joining the EEA), makes a free trade agreement with the EU, or reverts to the trade rules that govern relations between all World Trade Organization members . Prior to the referendum, the UK treasury estimated that leaving the EU would be bad for the UK's trade . </P> <P> On 10 August the Institute for Fiscal Studies published a report funded by the Economic and Social Research Council which warned that Britain faced some very difficult choices as it couldn't retain the benefits of full EU membership whilst restricting EU migration . The IFS claimed the cost of reduced economic growth would cost the UK around £ 70 billion, more than the £ 8 billion savings in membership fees . It did not expect new trade deals to make up the difference . </P>

What is the impact of brexit on the uk economy