Britain's government stepped up warnings on Wednesday that a "no-deal" Brexit would hammer the economy, but acknowledged that Prime Minister Theresa May's plan, opposed by many of her own side, would also leave the economy worse off than staying in the EU.
In a scenario resembling the agreement May has struck with other European Union leaders, national output would be 2.1 percent smaller in just over 15 years' time than if Britain remained in the bloc, the government said. But if there was no deal, it would be 7.7 percent smaller.
The report was seized on by opponents of Brexit, who said it undermined promises that leaving the EU would make Britain, and Britons, more prosperous.
"It took until this morning for the chancellor (finance minister) to finally admit it: We would be better off staying in the EU," said opposition Labour lawmaker Alison McGovern.
"He confessed that the government's deal would bring 'impediments' to trade. That means a threat to jobs."
The forecasts assumed for the purposes of comparison that there would be no changes to migration rules, but that some non-tariff trade barriers would be introduced.
However, perceptions that immigration was too high under the EU's freedom of movement policy were a key reason why many Britons voted in 2016 to leave the EU.
Assuming there was zero net migration from the EU in the future, the hit to the economy would be bigger: 3.9 percent under May's deal, and 9.3 percent without a deal.