‘Leaving European Union will lead to self-destruction’

British chancellor of the exchequer George Osborne listens as Prime Minister David Cameron delivers a speech on the economic impact of the UK leaving the European Union in Chandler’s Ford, southern England. (Photo: AFP)

Britain’s two most powerful politicians warned on Monday that a vote to leave the European Union in a month’s time could push the country into a year-long recession and cost at least half a million jobs.

Leaving the European Union would be economic self-destruction for Britain, shattering stability, Prime Minister David Cameron said on Monday, presenting a finance ministry report warning of recession, a tumble in the pound, and half a million job losses.

With Britain taking its most important strategic decision in decades on June 23, Prime Minister David Cameron and finance minister George Osborne made a fresh series of warnings of how households would be hit by a vote to leave the EU, ranging from a fall in the value of their homes to costlier foreign holidays.

“It would be a DIY recession,” Mr Cameron said, adding that leaving the EU move would jeopardise the efforts made by the country to recover from economic hardship caused by the world financial crisis.

“It would be like surviving a fall and then running straight back to the cliff edge. It is the self-destruct option,” he said.

Recent opinion polls have shown voters are leaning towards an “In” decision on June 23, but pollsters say the outcome remains too close to call.

Some polls have also shown the economy growing in importance as an issue for voters, something the “Out” campaign has sought to counter by stressing its message that only leaving the EU canslow high levels of migration.

A new analysis of short-term risks from the referendum published by the finance ministry on Monday said the economy could be as much as 6 percent smaller two years after a Brexitvote than if it the country decides to stay in the EU. Mr Osborne said Britain would lose at least half a million jobs within two years of a vote to leave the European Union and a fall in the value of the pound would push up inflation sharply.

The campaign backing a British EU exit said the Treasury had consistently produced flawed reports and the latest analysis provided nothing on the upside of leaving the bloc, nor on the potential negatives caused by a crisis in the euro zone.

“That makes this report categorically unfair and biased,” said Iain Duncan Smith, a former senior minister in Cameron’s conservative government.

“They cannot forecast short-term successfully, they have never managed to do it.”

Leading Brexit campaigner Boris Johnson, the former mayor of London who is tipped as a future Prime Minister, hit out at the “hysterical claims” by "Project Fear”. In an article in the Daily Telegraph on Monday, imagining how historians would look back on the debate, he suggested that “Project Fear turned out to be a giant hoax”.