(VOVworld) - The Institute for Fiscal Studies (IFS) has warned that leaving the European Union (Brexit) would force the UK to extend austerity measures by up to two years to avoid a budget deficit. British voters will decide whether the UK should stay or leave the EU in a June 23 referendum.

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The IFS said a Brexit would result in lower GDP growth and extra borrowing costs which could leave a 40-billion-pound hole in the government’s finances by 2020 and leave ministers struggling to balance the budget by 2022, two years later than government forecast. Carl Emmerson, IFS deputy director and an author of the report, said it is uncertain what the precise effect of leaving the EU would be on the British economy and public finances, but it is undoubted that the British economy would shrink by more than Britain’s reduced contribution to the EU budget.