REUTERS
The UK's exit from the European Union could cause "severe regional and global damage", the International Monetary Fund has warned in its latest outlook, according to BBC News.
A so-called "Brexit" would disrupt established trading relationships and cause "major challenges" for both the UK and the rest of Europe, it said, BBC News reports.
The IMF said the referendum had already created uncertainty for investors and a vote to exit would only heighten this.
Vote Leave said the IMF had been "consistently wrong" in past forecasts.
If the 23 June referendum in the UK were to produce a vote in favour of leaving the EU, the IMF would expect negotiations on post-exit arrangements to be protracted, which it warned "could weigh heavily on confidence and investment, all the while increasing financial market volatility".
Read alsoCameron: I hope Dutch rejection of Ukraine deal will not affect EU referendumIt also believes a UK exit from the EU would "disrupt and reduce mutual trade and financial flows" and restrict benefits from economic co-operation and integration, such as those resulting from economies of scale.
However, the Fund said that domestic demand, boosted by lower energy prices and a buoyant property market, would help to offset the impact on UK growth ahead of the EU referendum.
Read alsoCameron: Brexit would be "act of economic and political self-harm"Chancellor George Osborne said the IMF's comments reinforced the case for staying. "The IMF has given us the clearest independent warning of the taste of bad things to come if we leave the EU," he said.
Meanwhile, Prime Minister David Cameron tweeted: "The IMF is right - leaving the EU would pose major risks for the UK economy. We are stronger, safer and better off in the European Union."