Theresa May warned leaving EU Customs Union trade bloc could lead to a 4.5 per cent fall in GDP by 2030

LEAVING the EU Customs Union trade bloc could see UK GDP fall 4.5 per cent, studies say.

The predictions were made in a paper circulated at a meeting of Theresa May’s special Brexit cabinet committee.

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But the 4.5 per cent figure, which was quoted before the EU referendum, has been called out of date by Brexit- supporting MPs.

The studies, by the Treasury, the think-tank Nieser, the Centre for Economic Performance and London School of Economics estimated the effect on the British economy if the UK opted for a Norway-style model, according to the Guardian.

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The paper on the customs union said that to stand still in trade terms after a withdrawal from the bloc, the UK would need to grow trade with its ten largest partners outside the EU by 37 per cent by 2030.

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Despite the international trade secretary, Liam Fox, calling for the UK’s withdrawal at the meeting, Theresa May said she was not ready to make a final decision on the county’s negotiating position.

The EU Customs Union is a trade bloc which consists of all the member states of the EU, Monaco and some no-EU territories of the UK.

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No customs are levied on goods travelling within the union and members impose a common external tariff on all goods entering.

But one of the consequences for the UK is that the EU negotiates as a single entity in international trade deals instead of individual member states negotiating for themselves.