Northern Ireland

EU Referendum: George Osborne warns that EU exit could cost NI 14,000 jobs

George Osborne
Image caption George Osborne said that forecast showed the equivalent to a £1.3bn reduction in the local economy

Leaving the EU could cost 14,000 jobs in Northern Ireland within two years, Chancellor George Osborne has said.

Publishing Treasury analysis, he said a Leave vote would cause an "immediate and profound" economic shock with growth between 3% and 6% lower.

The Chancellor said that could be equivalent to a £1.3bn reduction to the Northern Ireland economy.

Vote Leave's Iain Duncan Smith said people would not believe the Treasury's "deeply biased view of the future".

The analysis ignored all the "upsides" from leaving, he told the BBC.

The Treasury's "cautious" economic forecasts of the two years following a vote to leave - which assumes a bilateral trade agreement with the EU would have been negotiated - predicts Gross Domestic Product (GDP) would grow by 3.6% less than currently predicted.

In such a scenario, it suggests sterling would fall by 12%, unemployment would rise by 520,000, average wages would fall by 2.8% and house price growth would be hit by 10%.

Image caption Vote Leave's Iain Duncan Smith said the Treasury had been 'hopelessly wrong' in previous forecasts

A second scenario, also modelled by the Treasury, predicts what would happen if Britain left the EU's single market and defaulted to World Trade Organization membership.

In this "severe shock" scenario, after two years GDP would be 6% lower, up to 820,000 jobs could go, take-home pay would fall by 4%, house prices would fall by 18% and the pound would be 15% lower.

The Treasury said it modelled the impact of a leave vote by looking at three key factors: the "transition effect" of the UK becoming less open to trade; the impact of "uncertainty" on the economy; and the potential "volatility" of financial markets.

The Chancellor said the analysis had been "peer reviewed" prior to publication by Charlie Bean, a former deputy governor of the Bank of England, and that the economist had said it was based on "reasonable estimates" and "best practice procedures".

The Vote Leave campaign said the worse-case scenario painted by the Treasury was worse than the Great Depression of the 1930s.

He added that the Treasury had been "hopelessly wrong" in previous forecasts, including in its support for the Exchange Rate Mechanism in the early 1990s.

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