British people would be voting to “self-destruct” if they chose to leave the EU because it would cause either a shock or severe shock to the economy, David Cameron has said.

The prime minister said voting to stay in the EU was the “moral” thing to do because the financial consequences of leaving could be very bad for UK families.

He said it would not make sense to have undergone “pain and sacrifice” after the 2008 financial crisis just to throw away the progress.

“Where is the morality for putting that at risk for some unknown end? It would be like surviving a fall, then running straight back to the cliff edge … The self-destruct option,” Cameron said.

The prime minister and George Osborne delivered the warning as they released a Treasury analysis that forecasts, in the event of Brexit: a fall in GDP of between 3.6% and 6%; a plunge in the value of sterling; lower house prices; a reduction in wages of between 2.8% and 4%; more than half a million job losses; more borrowing; and higher inflation.

Cameron said this was not even the most pessimistic analysis given that it was based on the assumption that the UK would be able to strike a deal with the EU in two years, which would be difficult to do.

His warning was echoed by the chancellor, who argued that the UK must not risk the progress it had made since the 2008 financial crash.

“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,” Osborne said. “The British people have worked so hard to get our country back on track. Do we want to throw it all away?

“With exactly one month to go to the referendum, the British people must ask themselves this question: can we knowingly vote for a recession?”

The Treasury document sets out clearly for the first time the government’s thinking on three different ways in which the UK could leave the EU.

In the first, a new deal with the EU would be negotiated within two years, allowing the UK to leave and enter straight into a new relationship with Brussels.

In the second, the UK would be unable to negotiate a deal with the EU within that timeframe, requiring it to get the agreement of other states for its membership to continue beyond that on a transitional basis.

In the third scenario, the UK would fail to reach an agreement with the EU and leave at the end of it, falling back on World Trade Organisation rules for its trading relationships. This was described as the worst option of all.

Cameron said it would be ambitious to get the deal with the EU agreed within two years given that it took Greenland – the economy of which is largely based around a single industry, fishing – about three years to leave.

Challenged about why he was holding a referendum when the outcome was going to be so negative, Cameron said it was right to give people a say when they had not been given that chance in a generation.

He was also asked if he was personally upset by Steve Hilton, his friend and former Downing Street adviser, making the case for Brexit in the Daily Mail.

The prime minister brushed this off, saying everyone was entitled to their opinions. “Here we have got the Treasury, having done a very comprehensive piece of work, backing up what the Bank of England, what the IMF [International Monetary Fund], what the OECD [Organisation for Economic Co-operation and Development], what many other economic forecasts, have [said], and I think that evidence is far more important than the view of one person or another person,” he said.

Speaking on his Vote Leave bus tour in York, Boris Johnson said the establishment was producing the most propaganda since 1992 “when they said that we couldn’t leave the European exchange rate mechanism. They said it would be a disaster. They said interest rates would go up, they said it would be an economic catastrophe for the economy if we left the European exchange rate mechanism, the Treasury said. And what happened? It was a liberation for this economy.”



Leading leave campaigners reacted with fury to the report, with Iain Duncan Smith, the former work and pensions secretary, accusing Osborne of telling lies about the economic impact of leaving the EU.

EU referendum: Cameron outlines 'shock' and 'severe shock' scenarios - Politics live Read more

He told BBC Radio 4 on Sunday night: “My immediate picture after we were being told yet another story of doom and gloom and how things were going to be terrible and there was no respite … I did really have this wonderful picture of Pinocchio … with his nose just getting longer and longer and longer.

“And I thought … very similar to the chancellor. With every fib you tell, it gets longer. Who am I to judge how many there have been? But certainly that nose did seem to get a lot longer.”

Two Conservative former chancellors campaigning for Brexit also attacked the Treasury document presented by Osborne. Nigel Lawson said the Treasury has “enough trouble with forecasts even when they are trying to get them right”.





“This time they have simply assumed a disaster in order to scare the pants off the British people,” he said.



Norman Lamont suggested that Osborne and the Treasury were deliberately undermining economic confidence in order to win their case. “A lot of the government’s so-called forecast depends on business confidence, which the government is doing its best to undermine. Economists are no better than anyone else in predicting shifts in confidence,” he said.





“We have nothing to fear but fear itself, which the government is doing its best to stir up.”