Chancellor George Osborne rekindled the EU referendum campaign with a new claim of losing up to 820,000 jobs lost within two years and a spell of recession
Publishing Treasury analysis, Osborne said a Leave vote would cause an “immediate and profound” economic shock, with growth between 3% and 6% lower. Prime Minister David Cameron said it was the “self-destruct option” for the country.
But Vote Leave’s Iain Duncan Smith told Radio 4 that people would not believe the Treasury’s “deeply biased view of the future”.
The analysis ignored all the “upsides” from leaving, he told the BBC.
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 grow by 3.6% less than currently predicted.
In such a scenario, it suggests sterling would fall by 12%, unemployment would rise by 520,000, average wages would fall by 2.8% and house price growth would be hit by 10%.
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, up to 820,000 jobs could go, take-home pay would fall by 4%, house prices would fall by 18% and the pound would be 15% lower.