Brexit Will Plunge UK Into Economic Abyss: Finance Minister

Britain could sink into a year-long recession if it votes to leave the European Union, finance minister George Osborne said in his latest attempt to focus voters on the potential hit to the economy from an "Out" vote.

RELATED:
First UK Black Studies Degree to Challenge 'White Curriculum'

"The British people must ask themselves this question: can we knowingly vote for a recession?" Osborne said in excerpts of a speech he is due to make Monday which were released by the finance ministry. "Does Britain really want this DIY recession?"

With a month to go before Britons take their most important strategic decision in decades, recent opinion polls have shown voters are leaning toward an "In" decision on June 23, but pollsters say the outcome remains too close to call.

Osborne and Prime Minister David Cameron, who are leading the "In" campaign, have stressed the risks of a so-called Brexit for Britain's economy, forecasting lower living standards, a fall in house prices and higher shopping bills.

WATCH: Labor MP Calls Cameron 'Dodgy Dave,' Ordered to Leave

The new analysis by the finance ministry of the referendum's short-term implications for the economy set out two post-Brexit scenarios.

A milder "shock" scenario—based on the U.K. reaching a trade deal with the EU—would result in the economy being 3.6 percent lower after two years than it would be if Britain stayed in the EU, the ministry said. Inflation would rise and house prices would be 10 percent lower than under an "In" vote.

The economy would suffer a more severe shock if Britain left the EU's single market—as suggested by some leading "Out" campaigners—and defaulted to World Trade Organization rules, which would raise barriers to trade.

Under that scenario, the economy would be 6 percent smaller within two years than if the U.K. voted to stay in the EU, inflation would rise more sharply and house prices would be 18 percent lower, the report said.

The rival "Out" campaign, which mainly consists of the Conservative Party’s most right-wing politicians, dismissed the new analysis as politically motivated.

"This Treasury document is not an honest assessment but a deeply biased view of the future and it should not be believed by anyone," said Iain Duncan Smith, a former senior minister in Cameron's Conservative government.

Supporters of a Brexit argue that Britain's economy would flourish outside the EU because it would be able to ditch rules imposed by the bloc and strike its own trade deals.

The Conservative Party has been split on the issue of remaining in the EU. Former Mayor of London Boris Johnson caused shockwaves in the party when he announced he would be campaigning for the U.K. to leave.