LONDON, May 9 (Xinhua) -- UK GDP in the longer term is estimated to be 3.1 percent lower in a customs union than it would have been had the UK stayed in the European Union (EU), said National Institute of Economic and Social Research (NIESR) in its new report released Thursday.

The report, entitled "The economic impact on the United Kingdom of a customs union deal with the European Union", estimated the economic impact of the scenario that the two sides would form a UK-EU customs union after Brexit.

The British think tank said the 3.1 percent of GDP shrink was equivalent to a loss of around 800 pounds (about 1,041 U.S. dollars) per person per year to people in the UK.

The report pointed out the reduction of GDP would mainly be a consequence of higher barriers to trade in services as a result of being outside of the European single market.

"Leaving the EU for a customs union will make it more costly for the UK to trade with a large market on our doorstep, particularly in services which make up 80 percent of our economy," said Garry Young, Director of Macromodelling and Forecasting at the NIESR.

He added: "This inevitably will have economic costs, with widespread implications. We estimate that all regions will be adversely affected and that there will be fewer resources available to pay for public services."

The report also found that there would be 13 billion pounds less a year to spend on public services in the scenario of customs union Brexit, compared with EU membership.