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| EU referendum: Brexit 'would spark year-long recession' - Treasury | EU referendum: Brexit 'would spark year-long recession' - Treasury |
| (about 1 hour later) | |
| Leaving the European Union would tip the UK into a year-long recession and lower Britain's economic growth by 3.6%, according to Treasury analysis. | Leaving the European Union would tip the UK into a year-long recession and lower Britain's economic growth by 3.6%, according to Treasury analysis. |
| The country would suffer an "immediate and profound" economic shock of its own making, Chancellor George Osborne, who released the study, warned. | The country would suffer an "immediate and profound" economic shock of its own making, Chancellor George Osborne, who released the study, warned. |
| But Vote Leave's Iain Duncan Smith said people would not believe the Treasury's "deeply biased view of the future". | But Vote Leave's Iain Duncan Smith said people would not believe the Treasury's "deeply biased view of the future". |
| It comes one month before the vote on Britain's EU membership on 23 June. | It comes one month before the vote on Britain's EU membership on 23 June. |
| The Treasury's "cautious" economic forecasts of the two years following a vote to leave - which assumes a bilateral trade agreement with the EU would have been negotiated - predicts Gross Domestic Product would drop by 3.6% and push the economy into recession. | The Treasury's "cautious" economic forecasts of the two years following a vote to leave - which assumes a bilateral trade agreement with the EU would have been negotiated - predicts Gross Domestic Product would drop by 3.6% and push the economy into recession. |
| There would also be a sharp rise in inflation and house price growth would be hit by 10%, it claimed. | There would also be a sharp rise in inflation and house price growth would be hit by 10%, it claimed. |
| A second, "severe shock" scenario, also modelled by the Treasury, predicts what would happen if Britain left the EU's single market and defaulted to World Trade Organization membership. | A second, "severe shock" scenario, also modelled by the Treasury, predicts what would happen if Britain left the EU's single market and defaulted to World Trade Organization membership. |
| In this scenario, after two years, GDP would be 6% lower and there would be a further increase in inflation, with a hit to house price growth of 18%, it predicts. | In this scenario, after two years, GDP would be 6% lower and there would be a further increase in inflation, with a hit to house price growth of 18%, it predicts. |
| Analysis | Analysis |
| By BBC political correspondent Tom Bateman | By BBC political correspondent Tom Bateman |
| This is the second time the Treasury has released a major document used by Remain campaigners to claim there will be serious damage to Britain's economy in the event of a vote to leave the EU. | This is the second time the Treasury has released a major document used by Remain campaigners to claim there will be serious damage to Britain's economy in the event of a vote to leave the EU. |
| To vandalise a well-worn election slogan - it tells us that Stronger In's referendum strategy is sticking with three priorities: the economy, the economy, the economy. | To vandalise a well-worn election slogan - it tells us that Stronger In's referendum strategy is sticking with three priorities: the economy, the economy, the economy. |
| It became clear weeks ago the Remain camp's playbook involved repeatedly trying to appeal to wavering voters with what were presented as sober economic assessments on the risks of leaving the EU. | It became clear weeks ago the Remain camp's playbook involved repeatedly trying to appeal to wavering voters with what were presented as sober economic assessments on the risks of leaving the EU. |
| Vote Leave are still fighting on this turf, but recent days have seen their campaign shift emphasis solidly to the issue of immigration - with what were claimed to be the risks of Turkish EU membership - a noticeable change of tack which fellow out campaigners in Ukip (not part of the officially designated campaign) had been calling for, believing it key to winning over undecided voters. | Vote Leave are still fighting on this turf, but recent days have seen their campaign shift emphasis solidly to the issue of immigration - with what were claimed to be the risks of Turkish EU membership - a noticeable change of tack which fellow out campaigners in Ukip (not part of the officially designated campaign) had been calling for, believing it key to winning over undecided voters. |
| Mr Osborne, who is due to visit a business on the south coast with the prime minister on Monday, is expected to warn voters not to choose a "do-it-yourself recession" for Britain. | Mr Osborne, who is due to visit a business on the south coast with the prime minister on Monday, is expected to warn voters not to choose a "do-it-yourself recession" for Britain. |
| "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," he is expected to say. | "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," he is expected to say. |
| "The British people have worked so hard to get our country back on track. Do we want to throw it all away?" | "The British people have worked so hard to get our country back on track. Do we want to throw it all away?" |
| The Vote Leave campaign has rebutted the Treasury's analysis as "fantastical", and said it had been "hopelessly wrong" in previous forecasts. | The Vote Leave campaign has rebutted the Treasury's analysis as "fantastical", and said it had been "hopelessly wrong" in previous forecasts. |
| Former cabinet minister Iain Duncan Smith said: "As George Osborne has himself admitted, the reason he created the independent forecaster, the OBR [Office for Budget Responsibility], was because by 2010 the public simply did not believe the government's own economic forecasts. | Former cabinet minister Iain Duncan Smith said: "As George Osborne has himself admitted, the reason he created the independent forecaster, the OBR [Office for Budget Responsibility], was because by 2010 the public simply did not believe the government's own economic forecasts. |
| "This Treasury document is not an honest assessment but a deeply biased view of the future and it should not be believed by anyone." | "This Treasury document is not an honest assessment but a deeply biased view of the future and it should not be believed by anyone." |
| Leaving the EU would save Britain money, and allow trade deals with growing countries outside the EU which would in turn create jobs, Mr Duncan Smith argued. | Leaving the EU would save Britain money, and allow trade deals with growing countries outside the EU which would in turn create jobs, Mr Duncan Smith argued. |
| The Treasury says it modelled the impact of a leave vote by looking at three key factors: the "transition effect" of the UK becoming less open to trade; the impact of "uncertainty" on the economy; and the potential "volatility" of financial markets. | The Treasury says it modelled the impact of a leave vote by looking at three key factors: the "transition effect" of the UK becoming less open to trade; the impact of "uncertainty" on the economy; and the potential "volatility" of financial markets. |
| A previous Treasury report, which looked at the long-term effect of an EU exit, claimed households would be £4,300 a year worse off, and the economy 6% smaller by 2030. | A previous Treasury report, which looked at the long-term effect of an EU exit, claimed households would be £4,300 a year worse off, and the economy 6% smaller by 2030. |
| Vote Leave also dismissed these estimates as "worthless" and "unbelievable", saying "few forecasts are right for 14 months, let alone 14 years". | Vote Leave also dismissed these estimates as "worthless" and "unbelievable", saying "few forecasts are right for 14 months, let alone 14 years". |
| EU referendum: In depth | EU referendum: In depth |
| EU for beginners: A guide | EU for beginners: A guide |
| UK and the EU: Better off out or in? | UK and the EU: Better off out or in? |
| A-Z guide to EU-speak | A-Z guide to EU-speak |
| Who's who: The Vote Leave team | Who's who: The Vote Leave team |
| Who's who: The Remain campaign | Who's who: The Remain campaign |
| Business Secretary Sajid Javid told BBC Radio 4's Today programme the UK currently had a clear arrangement with the EU. | |
| "We know we're not in the euro, we know we're not in the Schengen border-free zone, we know we're not going to be committed to ever-closer union. | |
| "We're also in the single market, which is of huge value to our firms, and to individuals. But if we leave, we don't know what the situation is going to be, other than knowing we will be leaving the single market." | |
| Meanwhile, Mr Cameron's former top strategy advisor, Steve Hilton, has come out in support for Brexit, saying Britain must leave the "arrogant and unaccountable" EU and put it "where it belongs - in people's hands". | |
| "Membership of the EU makes Britain literally un-governable, in the sense that no administration elected by the people can govern the country," he wrote in the Daily Mail. | "Membership of the EU makes Britain literally un-governable, in the sense that no administration elected by the people can govern the country," he wrote in the Daily Mail. |
| Bank of England governor Mark Carney warned earlier this month that the risks of leaving "could possibly include a technical recession". | Bank of England governor Mark Carney warned earlier this month that the risks of leaving "could possibly include a technical recession". |