George Osborne has been warned by top bankers that anti EU rhetoric that pushes the UK further from the core of Europe could well harm the city.
Any new deal to be negotiated between the EU and the UK repatriating powers could risk retaliatory moves against the financial services particularly by France and Germany.
Any deterioration in trading relations with the EU may put pressure on international banks to move jobs and operations to mainland Europe damaging the UK.
One banker commented, “You have to be worried, generally, about Britain distancing itself from core Europe and what the ramifications are for the financial services sector”.
Other major business leaders, including the president of the CBI, have recently highlighted the dangers that any confrontation with the EU poses and long term damaging effect it may have on the UK’s economy.