1. ITV Report

Osborne: 'Brexit would plunge Britain into year-long recession'

The Chancellor warned Brexit would have an Credit: PA

Quitting the European Union would plunge Britain into a year-long recession, according to George Osborne.

The Chancellor warned that the country would suffer an "immediate and profound" economic shock if it voted in favour of Brexit on June 23.

His comments are part of Treasury analysis ahead of the referendum in just one month's time.

The analysis claims that economic growth would be at least 3.6% lower in the event of Britain leaving the EU, and in the worst case scenario could plummet as much as 6%.

Osborne's warning comes shortly after alerts by Bank of England governor Mark Carney and the International Monetary Fund that quitting would leave the UK in the red.

Earlier this month, Bank of England governor Mark Carney also expressed Brexit warnings Credit: PA

Mr Osborne, who is visiting a business on the south coast with Prime Minister David Cameron to set out details of the Treasury study, will warn voters not to inflict a "do-it-yourself" recession on the country.

The Chancellor is expected to say as follows:

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? Because that's what the evidence shows we'll get if we vote to leave the EU.

Yes, we've got improvements to make to the EU - but we know what they are and we're clear about what the future holds.

If we remain, major British car manufacturers will go on selling hundreds of thousands of cars to Europe tariff-free.

If we remain, British farmers will go on selling over 150,000 tonnes of beef and lamb to Europe tariff-free. That is the brighter future on offer for our country.

– George Osborne
Osborne said British farmers would benefit from remaining in the EU Credit: PA

Using "cautious" assumptions, with the UK entering into a new trade deal with the EU, the Treasury report found GDP would be around 3.6% lower after two years compared to the forecast for continued growth after a vote to remain.

A sharp rise in inflation would also be expected and house price growth faces being hit by 10%.

Under a "severe shock scenario", where Britain would leave the Single Market and default to World Trade Organisation rules, GDP would be 6% lower after two years and there would be a further increase in inflation, with a hit to house price growth of 18%.

The assessment found that even under the more conservative modelling, recession would be expected "with a significant risk that the outcome could be far worse" while remaining would see "current uncertainty fall back rapidly with little lasting impact on the economy".

Vote Leave said the analysis was "not an honest assessment".

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