Banking firms preparing to leave U.K. ahead of 'Brexit'

A view of London's City financial district on June 29, 2012. (AP / Lefteris Pitarakis)

LONDON -- The head of the British Bankers' Association has warned that financial firms are planning to start leaving London within weeks because of uncertainty about the U.K.'s exit from the European Union.

Chief executive Anthony Browne said in an article published Sunday that banks fear EU politicians will erect trade barriers with Britain in a bid to undermine the City of London, currently Europe's pre-eminent financial district. They also fear U.K.-based financial firms will lose the right to conduct business across the bloc.

Browne wrote in The Observer newspaper that bankers' "hands are quivering over the relocate button." He said "many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year."

Browne said tariffs would hurt both Britain and the EU, but that economic arguments might lose out amid hardening political rhetoric from both sides.

He said national governments might "try to use the EU exit negotiations to build walls across the Channel to split Europe's integrated financial market in two, in order to force jobs from London."

Prime Minister Theresa May has repeatedly said that "Brexit means Brexit," suggesting her government is unwilling to compromise to keep Britain within the EU's single market.

British ministers have stressed the need for the country to control immigration -- a conflict with the EU's principle of free movement. EU leaders have said ending free movement will make it impossible for the U.K. to stay in the single market.

The British government said in a statement that it was "keenly aware of the importance of the financial services sector to the U.K. economy." It said British officials "have the resources required to get the best deal for the U.K."