If Britain chooses to leave the European Union (EU) this summer, its economy could suffer a "serious shock" and there would be a "real blow" for jobs, a leading business lobby group has warned.
A so-called Brexit could cost the economy as much as £100 billion ($144 billion) and 950,000 jobs by 2020, new research commissioned by the Confederation of British Industry (CBI) has found.
Analysis conducted by PwC looked at two possible EU exit situations, both looking at how successful certain trade negotiations would be reached for the U.K., following an exit.
In both scenarios, U.K. gross domestic product (GDP), living standards and employment would be "significantly reduced" compared to keeping its EU membership; with the average household income seeing a £2,100 to £3,700 drop in 2020 as one consequence.
Even if the U.K. quickly secured a free trade agreement with the EU, PwC analysis suggests that GDP could still slip as much as 3 percent in the next four years. However, the analysis does suggest the U.K. will see some signs of slight recovery by 2030 even if it chooses to leave.
Overall, the report highlighted five key potential impacts on the British economy if it leaves, which included reduced labor supply through migration; lower levels of investment and trade; and increased uncertainty, which could likely manifest itself in increased exchange rate and financial market volatility.
Speaking on behalf of the report, CBI's director-general, Carolyn Fairbairn said the research highlighted that leaving the EU would be "a real blow for living standards, jobs and growth."
"The savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment. Even in the best case this would cause a serious shock to the UK economy," Fairbairn said in a statement.
U.K. citizens will get a chance to decide whether they want to stay in the European Union on June 23, 2016, with the debate based on several key issues including economic governance, immigration, competitiveness and sovereignty.
The referendum however is "not going to put this issue to bed," Robin Bew, Economist Intelligence Unit's CEO and managing director, told CNBC Monday.
Bew added that while the economic reasons for staying in the EU remained reasonably clear, the voting intentions of the nation are based around a whole series of factors, many of which could be driven by emotive means.
In response to the CBI's latest research, pro-Brexit campaign, Vote Leave, criticized the report on Monday, with its chief executive, Matthew Elliott saying the CBI was "wrong" about its findings.
"The EU funded CBI are desperate to recreate the same scare stories they spread when they urged Britain to scrap the pound and join the euro. They were wrong then and they are wrong now," Elliott said in a statement.
—By CNBC's Alexandra Gibbs, follow her @AlexGibbsy and @CNBCi