The Bank of England has said that if Britain votes to leave the European Union, it could "materially" lower UK growth and lead to sharp falls in the value of the pound.
It issued the stark warning as its growth outlook was slashed for the next three years, as follows:
2% in 2016
2.3% in 2017
2.5% in 2018
The Bank also kept interest rates unchanged at 0.5%, where they have been since March 2009, in the latest inflation report.
Carney addresses the 'elephant in the room'
As he explained why inflation remained below target, Bank governor Mark Carney addressed the "elephant in the room" and said a Brexit vote would "lower growth materially and raise the rate of inflation notably".
"In the face of greater uncertainty about the UK's trading relationships, sterling would likely depreciate further, perhaps sharply."
"This would likely be consistent with changes to some of the real fundamentals that drive sterling, including the terms of trade, productivity, and risk premium," he added.
Sterling has dropped by 9% since its recent peak in November and the Bank estimates around half of this is due to referendum uncertainty.
Responding to the Bank's prediction, the prime minister said it is "right to warn" leaving the EU could "hurt working people".
The Chancellor also echoed Mr Cameron's warning, saying that it was a "big moment in the EU debate", adding that it would be a "lose-lose" outcome.