The Brexit vote is still several months away but preparations for the possible repercussions of the EU referendum results are already heating up. The Bank of England governor, Mark Carney, voiced deep concerns that the June 23rd vote could trigger destabilization in financial markets and has met with Prime Minister David Cameron to discuss pre-empting what he foresees as dire consequences should the referendum lead to a separation of the UK from its EU membership.

Carney appeared before the cross-party Treasury Select Committee Tuesday together with Sir Jon Cunliffe, deputy governor in charge of financial stability, to answer questions on a possible Brexit and its impact on the country. According to Carney, the extent of the effect on Britain’s financial markets would depend on what Britain negotiated with the rest of the EU, with the key issue being the degree of recognition granted to financial services in London. If a mutual recognition framework that would mirror the current regime could not be negotiated, many British firms—including major banks–would consider leaving the city. Carney pointed out should it come to that, negotiating a deal to protect the City of London after leaving the EU would take a long time.

THE BANK OF ENGLAND GOVERNOR, MARK CARNEY, VOICED DEEP CONCERNS THAT THE JUNE 23RD VOTE COULD TRIGGER DESTABILIZATION IN FINANCIAL MARKETS.

London Job Losses

When asked about job losses in the capital, Carney had no figures to offer but admitted that leaving the EU could lead to lower economic activity, with lower investment and spending that could lead to prices falling. And going it alone could also lead to the value of the pound falling, which might push up prices.

Carney told the MPs at the meeting that membership in the European Union carries risks especially the “unfinished business of European monetary union” but that in his opinion “The rest of the EU is more important to UK trade and investment than the converse.”