Leaked government documents report the UK could lose billions of pounds if they were to completely pull out of the trading bloc.
The United Kingdom could lose up to £66 billion a year under a "hard Brexit", The Times reported citing leaked government papers.
GDP could fall by as much 9.5 percent if Britain leaves the European Union compared with if it stays within the union, The Times reported.
The £66 billion figure was in a draft cabinet committee paper which was seen by The Times.
A report by consultancy firm Oliver Wyman earlier this week said Britain's financial industry could lose up to £38 billion in revenue in the event of a 'hard Brexit'.
A quarterly survey of 7,000 businesses by the British Chambers of Commerce (BCC) on Monday showed that Business investment and turnover confidence in the UK had hit four-year lows.
Another survey by Deloitte reported that chief financial officers in major British firms reported only a partial rebound in business morale after a post-Brexit vote nosedive.