City of London in last ditch plea for Brexit trade deal

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2 mins read
The early morning sun reflects on the financial buildings of Canary Wharf in east London. (Photo by Victoria Jones/PA Images via Getty Images)
The early morning sun reflects on the buildings in Canary Wharf in east London. Photo: Victoria Jones/PA Images via Getty Images

The UK’s financial services industry has made a last ditch plea to the government to reach a Brexit trade deal with the EU.

TheCityUK, a lobbying group for British finance companies, on Friday said a trade deal was of vital importance to preserving the UK’s banking and professional services sector.

“The art of agreeing a deal is recognising that both sides can emerge as winners,” said Emma Reynolds, the managing director for public affairs, policy and research at TheCityUK. “Failure means everyone loses.”

The warning comes as time ticks away in trade negotiations between the UK and EU. UK prime minister Boris Johnson has set a deadline of 15 October to reach a deal, pledging to walk away from talks if no deal is forthcoming by then.

Speculation has been mounting that talks could drag on beyond that deadline but whatever happens the UK will exit the Brexit transition period on 1 January 2021, meaning negotiators will still only have weeks to reach a deal.

Most analysts in the City of London expect a “skinny” trade deal between the EU and UK, which is unlikely to cover financial services. However, Reynolds said key issues needed to be resolved before the year-end deadline to prevent disruption to the financial services industry.

“There are still some big issues outstanding, such as how to continue regulatory and supervisory cooperation, maintain mutual access to skills and talent, manage data use and exchange, uphold the recognition of legal decisions and ensure operational resilience, but nothing which is insurmountable,” she said.

Financial and professional services are worth £200bn ($258bn) to the UK economy and over £30bn of that involves trade with the EU. London is a key hub for European countries to issue stock and debt, as well as execute trades through clearing houses based in the British capital.

“Whatever the outcome, London and the UK will continue in its role as leading European and global financial centre,” Reynolds said. “What is critical for our industry and for the UK’s future success is remaining open, outward-looking and continuing to be one of the most internationally competitive places to do business anywhere in the world.”

WATCH: What happens if UK fails to achieve a Brexit deal with the EU?