The governor of the Bank of England has clashed with Eurosceptics after he delivered a warning that leaving the EU is the "biggest domestic risk" Britain faces.
Giving evidence to MPs, Mark Carney said so-called Brexit could trigger a prolonged period of financial instability and have serious consequences for the housing market and City of London.
But he was rebuked by Treasury Select Committee member Jacob Rees-Mogg, who branded his intervention "speculative" and "beneath the dignity" of his office. Culture Secretary John Whittingdale has also cautioned that predictions of "Armageddon" if the UK were to leave could become self-fulfilling.
Under tough questioning during a three-hour session, Mr Carney stressed that the Bank was not making any formal recommendation on how people should vote in the June 23 referendum.
He also flatly denied that he had been pushed by Downing Street into making a grim assessment of the potential fallout.
Mr Carney said the UK leaving was not currently the "median" expectation of financial players, and highlighted effects such as a drop in the value of the pound.
"The issue is the biggest domestic risk to financial stability, because in part of the issues around uncertainty," Mr Carney told the committee.
"But also because it has the potential - depending on how it is prosecuted and how these issues can be addressed - to amplify the risks around the current account as has been discussed, potential risks around housing, potential risks around market function which we are trying to mitigate. And also associated risks with respect to the euro area.
"It is the biggest domestic risk to financial stability. I would say that in my judgment the global risks, including from China, are bigger than the domestic risks."
He declined to repeat the language of a G20 statement last month, which said leaving the EU would result in a "profound economic shock".
After the Bank announced it would give financial organisations access to more liquidity during the referendum period, Mr Carney pledged to "do everything in our power" to keep the markets calm.
But he warned that it was not possible to provide a "blanket assurance" that there would not be short term turbulence, which normally meant "poor economic outcome".
It was unclear whether the UK would secure full mutual recognition of regulations and standards - which would allow UK-based financial services companies to operate in the remaining EU under terms similar to the current "passporting" arrangements.
There would also be questions over whether Britain would lose its "substantial influence" over the development of EU financial regulations.
Asked whether uncertainties of this kind might lead companies to relocate business activities away from the City in the event of Brexit, Mr Carney said: "One would expect some activity to move. Certainly, there is a logic to that.
"There are views that have been expressed publicly and privately by a number of institutions that they would look at it. I would say a number of institutions are contingency planning for that possibility - major institutions, foreign headquartered, which have their European headquarters here.
"There would be an impact. I can't give you a precise number in terms of institutions or jobs or activity, because we don't know where we would be on that continuum between full mutual recognition or pure third-country access."
A heated debate with Mr Rees-Mogg saw Mr Carney accused of damaging the Bank's reputation by making "speculative" pro-EU comments without the facts to support the view.
The Tory MP said: "It is beneath the dignity of the Bank of England to be making speculative pro-EU comments."
Asked also why the financial transaction tax - the so-called proposed Robin Hood tax on banks - was not listed in the Bank's letter to MPs on the recent EU deal, Mr Carney said it was relatively low down on his list of concerns.
He added: "We have to make a judgment on the probability of it actually coming into force."
MP John Mann questioned the central bank boss over the impact of a Brexit on jobs, wages and prices in the UK.
Mr Carney stressed the Bank was not assessing the direct economic impact of a Brexit, but said the uncertainty surrounding the referendum could have an impact on household and business spending, while sharp falls in the value of the pound could push up inflation.
Questioned by leading Tory Eurosceptic Steve Baker, Mr Carney flatly denied that he had been pushed by Downing Street into highlighting the risks of Brexit.
"We are expressing views that are the views of the institution," he said. "We are not leaned on by anybody.
"It would have no effect if they tried."
Mr Carney also suggested that Boris Johnson declaring for the Out campaign could have contributed to the slump in the value of sterling.
Asked whether the London mayor's announcement had an impact, he replied: "The combination of having the agreement, and therefore a date for the referendum, and the tangible evidence of a campaign in favour of Leave with credible politicians as part of that - not least represented on this committee - concentrated the minds."
Mr Carney said the moves in sterling were "relatively large" but "not unprecedented".
Speaking at a lunch for journalists after the hearing, Mr Whittingdale denied that there would be an initial hit to the economy in the event of a vote to leave the EU.
"It is perfectly true that there are certain unanswered questions if we choose to leave and we will have to negotiate new arrangements," he said. "But this country is the fifth biggest economy in the world. We sit on the G7, on the UN Security Council, we are able to prosper outside the EU and in many ways we would be liberated to do things we cannot do at the current time."
He also insisted the Government should be preparing for both outcomes from the referendum, and urged senior figures to be "careful" about the language they used to describe risks.
"Telling people that Armageddon will follow from our withdrawal in my view is both wrong but also dangerous, in that if then Britain did decide to leave people may react on the basis that they have been told this is going to cause all these economic shocks," the Tory minister said.
"The financial institutions every day hedge against risk. They take account of uncertainty. Nobody can predict anything.
"While it is true perhaps that the question of the UK's membership of the EU is the biggest issue in domestic politics there are so many uncertainties out there in the world today relating to China, the Middle East, the oil price...
"This in some ways is less of an issue than some of the global challenges we face."