Get ready for an economic crash if Britain leaves the EU

crash

REUTERS/Kai Pfaffenbach

Britain's economic growth could tank by 3.6% if we leave the European Union, according to the Treasury.

Under a shock scenario, the UK's GDP growth would be 3.6% lower than the current forecast of a 4.3% increase by 2018.

The falling pound would drive prices for imported goods upwards and house prices would drop by about 10% across the country, according to the report.

Under a less likely, but more severe, scenario, GDP could fall by as much as 6%.

The government is trying to sway voters to stay in the EU. The referendum on June 23 "is more important than a general election," Prime Minister David Cameron said on Sunday.

If voters don't like a government they can kick them out after five years but reversing a decision to leave the EU would be "very, very difficult," Cameron said.

He said the shock to the economy of a Brexit would be severe. Leaving the European Union could add £220 a year onto each household's food bill, he said in an interview with ITV's Robert Peston.

Cameron said that supermarket bosses warned "prices would go up if we left the EU because there'd be a shock to the economy, the pound would fall, and that would mean the prices we pay in this economy would be higher, particularly for food because we import so much."

"Is it worth taking this risk? I, as Prime Minister of this country, absolutely believe it is not worth the risk of taking this step," Cameron said.

The campaign appears to be working. The probability of Britain voting to leave the European Union on June 23 is currently less than 20%, according to polling analyst Matt Singh.

Singh, the polling analyst behind Number Cruncher Politics (NCP), said in his latest blog post that while some of the results of polls published this week have been dramatically varied, they don't change the overall picture of Remain being the most likely victors.

In fact, according to his updated forecast, the probability of Britain voting to leave the EU is just 19.6%.

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See Also:

• A Brexit will set off a ticking timebomb in Britain's commercial property market

• BREXIT POLLS: 'Leave' is winning — and the pound is getting pulverised

• DIMON: JPMorgan could move some of its 16,000 UK jobs to Europe in the event of a Brexit

• This chart shows if Britain doesn't leave the EU in 2016, it may never happen