The U.K. government issued its starkest warning yet about the dangers of a vote to leave the European Union in next month's referendum, saying it risks causing a yearlong recession, sparking a decline in the pound and costing hundreds of thousands of jobs.

Gross domestic product in 2018 would be 3.6 percentage points lower than the current forecast, which is for a 4.3 percent increase, the Treasury said Monday in a document assessing the short-term economic consequences of a so-called Brexit. That's under a "shock scenario" that the Treasury described as "cautious." Under a "severe shock" scenario, GDP would be 6 percentage points lower than otherwise, and house prices would fall about 10 percent from current levels.

"With exactly one month to go to the referendum, the British people must ask themselves this question: can we knowingly vote for a recession?" Chancellor of the Exchequer George Osborne said in a speech at the headquarters of home-improvement chain B&Q in Eastleigh, southern England. "Does Britain really want this DIY recession?"

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