Bank of England: Brexit could 'materially' lower UK growth

The International Monetary Fund (IMF) is set to wade into the Brexit debate following the Bank of England's comments it could spark a recession.

IMF chief Christine Lagarde is expected to deliver a sharp warning to Chancellor George Osborne when she meets him at the Treasury later.

Tory MP and Leave campaigner Jacob Rees-Mogg has called for Bank of England governor Mark Carney to be fired over his comments.

He accused Carney of "intervening speculatively in a political matter" when he should remain independent.

The economy and immigration dominated discussions over the EU referendum campaign today.

Mark Carney, the governor of the Bank of England, predicted another recession should Britain vote to leave Europe, with higher inflation, higher unemployment and a weaker pound.

And the Office for National Statistics announced that the number of people arriving in the UK from the EU - as counted by National Insurance applications - was far higher than the figures the government has been relying on.

ITV News deputy political editor Chris Ship reports:

The head of the Bank of England today made an unprecedented intervention in the EU debate - warning that Britain risks going into recession if it votes to leave Europe.

Mark Carney said Brexit could cause inflation and unemployment to rise, and the pound to fall sharply.

David Cameron said it was a "very clear message" about the dangers of Britain going it alone, but furious Leave campaigners said the governor was not being prudent, and could cause a crisis.

ITV News deputy political editor Chris Ship reports:

Bank of England Governor Mark Carney's warning of a "technical recession" if Britain leaves the EU amounts to "a very clear message" of the dangers of Brexit, Prime Minister David Cameron has said.

Earlier, Mr Carney said a vote to leave the European Union on June 23 could "materially" lower UK growth and lead to sharp falls in the value of the pound.

Supporters of the Leave campaign have accused the Governor of risking a self-fulfilling crisis, as the London markets fell on the Bank's warnings.

But Mr Cameron insisted it was the Bank's job to warn of risks to security.

He also accused the Leave camp of "celebrating insecurity" after prominent backer Peter Hargreaves said the stimulus provided by uncertainties outside the EU would be "fantastic".

Bank of England governor Mark Carney addressed the "elephant in the room" as he outlined the main reasons why UK growth is predicted to lower "materially" in the event of a Brexit.

He said a vote to leave the European Union would "lower growth materially and raise the rate of inflation notably".

"In the face of greater uncertainty about the UK's trading relationships, sterling would likely depreciate further, perhaps sharply," he added.

"This would likely be consistent with changes to some of the real fundamentals that drive sterling, including the terms of trade, productivity, and risk premium."

The prime minister has said the Bank of England is "right to warn" leaving the EU could "hurt working people".

The Bank has warned that a Brexit could materially" lower UK growth and lead to sharp falls in the pound.

Responding to the Bank of England's warning that a Brexit vote could "materially" lower UK growth, the Chancellor said it was a "big moment in the EU debate".