A Brexit vote is likely to send the pound plummeting as pre-poll jitters are already hitting the housing market, the Bank of England has warned.

The intervention came as Mark Carney, the Bank's governor, insisted he had every right to comment on the economic impact of the UK's potential withdrawal from the European Union after being accused of breaking impartiality rules by Tory backbencher Bernard Jenkin, a leading Leave campaigner.

The Bank insisted it was "increasingly probable" a Leave vote in next week's referendum would sharply damage the value of sterling across international money markets.

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Financial experts have warned uncertainty surrounding the outcome of the poll is already forcing consumers to put off "major economic decisions" and provoking a slowdown in house and car sales.

The Bank insisted the referendum remained the "largest immediate risk" facing financial markets as its Monetary Policy Committee decided to hold rates at the 0.5 per cent level they have been at since March 2009.

Earlier this week, Janet Yellen, who chairs the US Federal Reserve, admitted the possibility of Brexit was one factor in it keeping its interest rates on hold.


The latest foray by the Bank into the increasingly bitter referendum debate came after an angry war of words broke out between Mr Carney and the Essex Conservative MP.

Bank sources revealed the governor considered a letter from Mr Jenkin, stating that he had made his views on the referendum public despite strict impartiality “purdah” rules, to be a "political threat".

The Tory MP, who chairs the Commons Public Administration Committee, hit back by branding the governor's response as "very aggressive".

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In a strident response, Mr Carney said Mr Jenkin's letter contained "numerous and substantial misconceptions".

He also accused the Conservative backbencher of having a "fundamental misunderstanding" about the independence of the Bank.

The governor wrote: "All of the public comments that I, and other Bank officials, have made regarding issues related to the referendum have been limited to factors that affect the Bank's statutory responsibilities and have been entirely consistent with our remits."


But Mr Jenkin claimed Mr Carney's intervention in the referendum debate had gone "way beyond what a Bank governor would normally do in terms of making statements about rate setting and economic forecasts".

He told BBC Radio 4's Today show: "He's reacted very, very aggressively towards me.”

The backbencher said there was no doubt that the Bank chief’s recent appearance on the BBC’s Andrew Marr programme went “way beyond” what a governor would normally do in terms of making statements about rate setting and economic forecasts.

"I obviously misconstrued that because in my letter to him I said he had made his views clear that he wants the United Kingdom to stay in the European Union," added Mr Jenkin.

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But Lord Darling, the Labour ex-chancellor, accused the Tory MP of engaging in a "blatant attempt to muzzle a respected independent voice".

He added: "It is very clear the Leave campaign doesn't want people to hear what the Bank has to say on the most critical issue facing our generation because they don't like its conclusions."

The row followed an earlier one when a statement was published by four senior Conservatives, including two former chancellors, Lords Lamont and Lawson, who attacked the Bank as well as the Treasury for "peddling phoney forecasts" to scare voters into choosing to remain in the EU.

The former chancellors together with ex-party leaders Iain Duncan Smith and Michael Howard poured scorn on warnings of economic disaster from the Stronger In campaign.

They hit out at pro-Remain Tories for their behaviour in the referendum debate, describing Chancellor George Osborne's threat this week of an emergency Budget in the event of Brexit as "ludicrous scaremongering born of desperation".

But David Cameron hit back, saying it was "deeply concerning" that senior Conservatives had criticised the "independent" Bank of England.

"We should listen to experts when they warn us of the dangers to our economy of leaving the European Union," declared the Prime Minister.