Brexit: Banks will get 'no special treatment' when UK leaves EU

The City fears a hard Brexit could prevent firms in London from offering services across the EU

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The Independent Online

British financial firms will get no special treatment from Prime Minister Theresa May in the country’s negotiations to leave the EU, according to a new report.

Britain’s finance sector is concerned it might lose its “passporting” rights, which ease access to business in the EU’s member states. 

But according to a Bloomberg report, citing three senior figures in the British government, Theresa May will refuse to prioritise the protection of the sector after the UK has left the EU.

The Government has also reportedly dismissed the sector’s demand for an interim deal with the EU to help ease the transition out of the bloc. Downing Street had no immediate comment on the report. 

Questioned about her pre-referendum warnings on the economic impact of a UK vote to leave the EU  on Tuesday morning, the Prime Minister insisted she would start the process from a position of strength.

“I think it’s not about the UK, in some sense, being a supplicant to the EU,” she told the BBC.

“It’s about the reciprocity here. A good trade deal is going to be of benefit to us and to the EU.”

Theresa May revealed on Sunday that she will launch formal Brexit talks with EU leaders before the end of March 2017. The timing means the UK looks set to leave the EU by summer 2019.

Fears of the consequences of a so called “hard Brexit” sent the pound tumbling to a 31-year low against the dollar on Tuesday.

Sterling dipped 0.7 per cent to $1.2747, its lowest level against the US dollar since 1985, extending its losses from the previous day. The pound fell 0.4 per cent against the euro to €1.1415, while the FTSE 100 was up 1.6 per cent at 7,094 points.

Last month, Andrew Tyrie, the chairman of the Treasury Select Committee, revealed the scale of the threat to the UK’s financial services sectors, saying nearly 5,500 British firms hold at least one passport to do business in another member state of the EU or the wider European Economic Area (EEA).

Financial institutions and banks including UBS and JP Morgan Chase have warned they could move staff out of London as the capital becomes a less important financial centre, depending on the terms of the departure from the EU bloc.

Lloyd’s of London chairman John Nelson previously described the UK’s vote to leave the EU as a “major issue”, saying it is working on contingency plans to ensure it can still trade across Europe when Article 50 is triggered.