GETTY Lord Blackwell spoke out about the EU in a House of Lords debate

FREE now SUBSCRIBE Invalid email Make the most of your money by signing up to our newsletter fornow We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

Lloyds Banking Group chairman Lord Blackwell, speaking in a personal capacity, said the current situation was not "ultimately sustainable". But he said the UK is likely to remain attractive to investment "whatever the outcome" of the in-out referendum, set to be held in 2017. He admitted his comments, made in the House of Lords, will be seized upon by Eurosceptics looking to break away from the union. Lord Blackwell said: "I don't agree that remaining in the European Union without a significant change in the current arrangements is ultimately sustainable from a political and constitutional perspective, nor do I believe that there is a compelling economic argument to overcome those reasons.

"The long-run impact of a change in our position will depend upon whether any attempts to create trade barriers are offset by the potential benefits from being free to develop a less regulated and potentially globally competitive UK economy. "There are voices on both sides of that argument, but in the end our global competitiveness in markets outside the European Union must be a primary concern." He said the simplest solution would be to stay in the single market if changes to keep industry and the City of London competitive were made. But if Britain did leave a trade agreement would still be needed.

PA Lord Rose and Baroness Brady at the launch of the pro-EU campaign

GETTY Boris Johnson has played down the impact of leaving the EU

There are voices on both sides of that argument, but in the end our global competitiveness in markets outside the European Union must be a primary concern Lord Blackwell

He added: "While uncertainty may mean some business investment is held back in the short term, there are many reasons why the UK are likely to remain an attractive global location whatever the outcome." Lord Blackwell's comments came as former Marks & Spencer chairman Lord Rose launched the campaign to stay in the EU. Launching the Britain Stronger in Europe group yesterday he said being in the union brings £450 of benefits to each British household every year.

GETTY David Cameron and Angela Merkel: The pair have been in talks about renegotiating EU membership

London Mayor Boris Jonson, however, played down the impact of leaving Europe. Speaking in Japan he said: "We want, in an ideal world, to stay in a reformed European Union but I think the price of getting out is lower than it's ever been. "It's better for us to stay in, but to stay in a reformed EU. That's where I am."