Image: Gareth Milner Image: Gareth Milner

The UK would fall into a year-long recession if the public voted to the leave the European Union, the Treasury has warned.

Publishing the study, the Chancellor George Osborne said the UK's economic growth would likely to 3.6% lower than it is now. With the economy set to grow by around 2% in 2016, that would leave it contracting by around 1.6%.

Mr Osborne said there would be an "immediate and profound" shock in the economy if the public opted for a Brexit.

That estimate is based on the assumption that the UK will have negotiated a bilateral trade agreement with the European Union to replace the current single market arrangement. The Treasury also forecast a sharp rise in inflation and a decline in house prices.

However, in a another scenario, if a bilateral trade agreement was not agreed and the UK defaulted to a membership with the World Trade Organization, the Treasury estimates GDP will be 6% lower, further rises in inflation and a house price growth hit by 18%.

The Chancellor warned the public that a vote to leave would spark a "do-it-yourself recession".

Speaking to businesses along the south coast, he said: "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?"