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Brexit to create instant 'DIY recession' warns George Osborne Brexit to create instant 'DIY recession' warns George Osborne
(35 minutes later)
Brexit could plunge Britain into an instant recession, the Prime Minister and the Chancellor have warned in the starkest economic warning yet of the consequences of Britain leaving the European Union.Brexit could plunge Britain into an instant recession, the Prime Minister and the Chancellor have warned in the starkest economic warning yet of the consequences of Britain leaving the European Union.
According to the Government the recession – defined as at least two consecutive quarters of negative growth – would last for a year and leave the level of UK GDP 3.6 per cent lower in two years time than otherwise if Britons vote to leave the 28-member bloc on 23 June. According to a new analysis by the Treasury the recession – defined as at least two consecutive quarters of negative growth – would last for a year and leave the level of UK GDP 3.6 per cent lower in two years' time than otherwise if Britons vote to leave the 28-member bloc on 23 June.
“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” said George Osborne.“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” said George Osborne.
The Treasury’s figures are based on the assumption that the UK manages to negotiate a bilateral trade agreement with the EU in the wake of Brexit. But it said that if Britain could not do this deal the consequences would be still more damaging and GDP could be up to 6 per cent lower by 2018. The Treasury’s figures are based on the assumption that the UK manages to negotiate a bilateral trade agreement with the EU in the wake of Brexit. But it said that if Britain could not do such a deal the consequences would be still more damaging and GDP could be up to 6 per cent lower by 2018.
The Leave campaign dismissed the warning as further scaremongering.The Leave campaign dismissed the warning as further scaremongering.
“This Treasury document is not an honest assessment but a deeply biased view of the future and it should not be believed by anyone” said the former Cabinet minister Iain Duncan Smith“This Treasury document is not an honest assessment but a deeply biased view of the future and it should not be believed by anyone” said the former Cabinet minister Iain Duncan Smith
The Treasury said its economic analysis had been reviewed by Professor Sir Charles Bean, a former Deputy Governor of the Bank of England, who was “acting in a personal capacity”. The Treasury said its economic analysis had been reviewed by Professor Sir Charles Bean, a former Deputy Governor of the Bank of England, who was “acting in a personal capacity”. 
The Governor of the Bank of England, Mark Carney, said earlier this month that a “technical recession” for the UK was possible in the event of Brexit. The managing director of the International Monetary Fund, Christine Lagarde, concurred the following day. The IMF is expected to release its full evaluation of the likely economic impact of Brexit in the week before the vote. The Governor of the Bank of England, Mark Carney, said earlier this month that a “technical recession” for the UK was possible in the event of Brexit. The managing director of the International Monetary Fund, Christine Lagarde, concurred the following day. The IMF is expected to release its full evaluation of the likely economic impact of Brexit in the week before the referendum vote.
The analysis from the Treasury is also set to warn that UK house prices will be 10 to 18 per cent lower by 2018 than otherwise as a result of Brexit and the absence of a bilateral trade deal.  The analysis from the Treasury is also set to warn that UK house prices will be 10 to 18 per cent lower by 2018 than otherwise as a result of Brexit and the absence of a favourable trade deal. 
Last month the Treasury published a long-term analysis of the economic impact of Brexit. This said that GDP by 2030 was likely to be around 6 per cent smaller than otherwise, equivalent to around £4,300 per head of population.Last month the Treasury published a long-term analysis of the economic impact of Brexit. This said that GDP by 2030 was likely to be around 6 per cent smaller than otherwise, equivalent to around £4,300 per head of population.
There is a clear consensus among independent economists that Brexit would be harmful to the UK economy. 196 economists signed a letter to The Times earlier this month saying that leaving the UK “would entail significant long-term costs” and “a sizeable risk of a short-term shock to confidence”.There is a clear consensus among independent economists that Brexit would be harmful to the UK economy. 196 economists signed a letter to The Times earlier this month saying that leaving the UK “would entail significant long-term costs” and “a sizeable risk of a short-term shock to confidence”.