A British EU exit, or Brexit, could cost the country some 100 billion pounds (144 billion dollars) and result in the loss of 950,000 jobs by 2020, a leading business group said on Monday.
A Brexit could cause economic growth to fall from the current 2 per cent to zero within two years, while annual GDP per household could drop by up to 3,700 pounds, according to a survey commissioned by the Confederation of British Industry (CBI).
Unemployment could also rise by up to 3 percentage points, the CBI said.
"On the impact for business, it is hard to see circumstances under which the UK could get a better set of deals on trade and investment outside the EU," Carolyn Fairbairn, the CBI's director-general, said in a speech at the London Business School on Monday.
"Leaving the EU would hit some of the UK's top sectors hardest," Fairbairn said. "And current global uncertainty means that now could be one of the worst times to leave."
The CBI, which represents some 190,000 businesses, commissioned consultants PwC to examine the potential effects of a Brexit on Britain's trade, investment, jobs and growth ahead of an in-out referendum on June 23.
The survey concluded that Britain's economic growth would need at least 15 years to recover from a Brexit.
But Eurosceptics campaigning for Britain to leave the EU rejected the study, claiming it was politically motivated and designed to spread "scare stories."
"The CBI-PwC report claims to be an economic case, but the motivation is purely political," said Mark Reckless, economics spokesman for the UK Independence Party.
"It must also be remembered that both the CBI and PwC are in receipt of huge funding from the EU," Reckless said in a statement on the party's website.
"The CBI and PwC are naturally supportive of the EU, which through a never-ending supply of cheap unskilled imported labour keeps wages low and profits high," he said.
Matthew Elliott, head of the cross-party Vote Leave campaign, said leaders of the CBI were "desperate to recreate the same scare stories they spread [in 1999] when they urged Britain to scrap the pound and join the euro."
Prime Minister David Cameron has urged people to vote for remaining part of the EU after he negotiated a deal for reforms that would give Britain a "special status."
The CBI has backed Cameron's campaign, praising the EU reform package as "a major step forward," while a survey last week found some 80 per cent of CBI members agreed that remaining in the EU would be best for their business.