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One of the world's leading economic organisations has warned that the UK would suffer a "large, negative shock" in the event of a Brexit.

The Organisation for Economic Co-operation and Development (OECD) said UK GDP would be 3% below the level it would be if the UK stays in the European Union. It also said every country in the EU would suffer a 1% fall.

Added difficulties in international trade would result in worse productivity and a weaker dynamism, the think tank claimed.

Having forecast economic growth of 2.2% in 2016 in February, the OECD now expects the UK economy to grow by just 1.7% this year, assuming it remains in the EU.

The OECD highlighted that the negative shock would not be confined to the UK.

"Weaker demand in the European economies also adversely affects the rest of the world, with GDP in the Brics and other non-OECD economies lowered by over half a percentage point by 2018," the OECD said.

"Within these groups, Turkey and Russia are relatively heavily hit, reflecting their comparatively strong trade linkages with the European economies."

It added: "The weaker UK economy, as well as possible new restrictions after exit from the European Union, would lower net migration inflows, adding to the supply-side challenges by reducing the size of the labour force.

"Some of these effects could be offset by reductions in domestic regulatory burdens, but the overall net effect on living standards would be strongly negative.

"By 2030, UK GDP could be over 5% lower than otherwise if exit had not occurred."

The Chancellor George Osborne welcomed the OECD's report. He said: "While the Leave campaign indulges in the fantasy politics of uncosted and unworkable proposals, in the real world we have had today another wake-up call of the grim economic consequences of leaving the EU and the single market.

"The highly respected, independent OECD has significantly downgraded Britain's growth today because of uncertainty about the outcome of the referendum, and they are clear that is just a taste of worse to come if Britain leaves the EU."