Image: Parliament Live Image: Parliament Live

The UK's membership of the European Union has benefited the economy, the governor of the Bank of England has told MPs.

In a letter sent to the cross-party committee before the hearing, Mark Carney said the membership had "likely increased the dynamism of the UK economy and correspondingly its ability to grow without generating risks to the Bank's primary objectives of monetary and financial stability".

Pro-leave Conservative MP Jacob Rees-Mogg accused the governor of siding with the EU, and compromising the dignity of the Bank of England in the process. He said: "It is speculative and beneath the dignity of the Bank of England to be making speculative, pro-EU comments."

But Mr Carney stressed: "We will not be making, and nothing we say should be interpreted as making, any recommendation with respect to that decision."

Speaking alongside one of the Bank's deputy governors, Sir Jon Cunliffe, Mr Carney said that leaving the EU would "without doubt" result in the loss of some business in the UK's financial sector, but refused to speculate as to what extent the impact would be.

He did, however, outline the overall impact of a Brexit in the short-term. He said: "There could be lower levels of activity because of the degree of uncertainty that could affect investment and household spending. Reasonable expectations during a period of uncertainty."

Mr Carney also suggested that a number of financial institutions are already making contingency plans for a Brexit. He said: "One would expect some activity to move, certainly there's a logic to that and there are views that have been expressed publicly and privately by a number of institutions that they would look at it, and I'd say a number of institutions are contingency planning for that possibility."