By Huw Jones
LONDON (Reuters) - Britain would face trade barriers if it left the European Union and its single market, the EU's financial services commissioner Jonathan Hill will say later on Monday.
Hill, appointed to the European Commission by UK Prime Minister David Cameron, is set to step up warnings on the consequences for the City of London financial district if Britain votes to leave the 28-country bloc in a June 23 referendum, also known as Brexit.
Financial services are Britain's biggest export earner and are flourishing, with London last year rated by the Global Financial Centres Index as the world's most competitive financial center, Hill will tell students at the London School of Economics on Monday evening.
This was hardly a sign of a City drowned or strangled in red tape as is sometimes claimed, he will say in remarks made available in advance to the media.
"If Britain leaves it is certain that there will be barriers to trade and that will damage the British economy, jobs and growth," Hill will say.
Outside the EU, British banks and other financial firms would have to set up a separate subsidiary with its own capital within the trading bloc, which is "neither cheap nor simple", Hill will say.
Backers of Brexit say Britain's financial sector could flourish outside the EU and the single market by negotiating attractive trading terms with a range of countries.
In a separate speech due later on Monday, the Grassroots Out campaign for leaving the EU will say Brexit is the best option for the future of financial services in Britain.
"If we stay in the EU, the City will be under siege. It will have to deal with wave after wave of attacks from Brussels, but will be powerless to fight back," said Steven Woolfe, financial affairs spokesman for the UK Independence Party.
Woolfe, a member of the European Parliament, will say the financial services sector could add 25 billion pounds to London's output and over 200,000 jobs across Britain by 2020 if free of burdensome EU regulation.
The government has negotiated reforms which it says will stop Brussels from imposing financial rules on the City, but Woolfe will say they contain no guarantees for British financial services.