By Jonathan Davies

London should brace itself for a wave of global banks leaving the city if the UK votes to leave the European Union, ratings agency Standard & Poor's.

Standard & Poor's said half of all foreign direct investment into the UK's financial services sector comes from the EU.

An EU exit would leave banks unable to use London to trade across the EU.

S&P’s credit analyst Frank Gill said: “We believe it could significantly dent the UK’s current net trade surplus in insurance and financial services of more than 3% of GDP.

“However, the extent of this impact will crucially depend on what alternative free trade arrangements the UK government could agree with its European partners in the event of an exit.”

US bank Citigroup is already in the in the process of moving its European retail banking headquarters to Dublin. Meanwhile, HSBC, which is the UK's biggest bank, is currently reviewing whether or not to move its headquarters out of the UK.