George Osborne warned that if the UK votes to leave the European Union the economy could enter a year-long recession.
A new analysis by the finance ministry claims that a Brexit would lower Britain’s economic growth by 3.6% after two years compared to if it remained in the EU. Inflation would also rise sharply and house price growth would be hit by 10%, the analysis added.
Osborne, who released the study, will say in a speech later today:
“It’s only been eight years since Britain entered the deepest recession our country has seen since the Second World War. Every part of our country suffered.The British people have worked so hard to get our country back on track. Do we want to throw it all away?
“With exactly one month to go to the referendum, the British people must ask themselves this question: can we knowingly vote for a recession? Does Britain really want this DIY recession?”
Meanwhile, fellow Cabinet minister and Vote Leave campaigner, Iain Duncan Smith, called the study “deeply biased” and “not an honest assessment” of what would happen.
Mr Duncan Smith was quoted by Sky News as saying: “As George Osborne has himself admitted, the reason he created the independent forecaster, the OBR, was because by 2010 the public simply did not believe the Government’s own economic forecasts.
“The Treasury has consistently got its predictions wrong in the past.
“This Treasury document is not an honest assessment but a deeply biased view of the future and it should not be believed by anyone.
“It is a fact that we hand over £350m a week to the EU. If we Vote Leave we can take back control of that money and use it to help people here in Britain.
“We will also take back control over our economy, creating hundreds of thousands of new jobs as we do trade deals with growing countries in the rest of the world.”