The Government is braced for the likes of Paris, Frankfurt and Luxembourg to launch a new fight to win a fund management business from London after Brexit.
According to the Financial Times, a French-backed move to limit the access British managers have to EU funds is feared by ministers and Bank of England officials.
A member of Prime Minister Theresa May’s Brexit team is quoted as saying: “There has been a lot of focus on the impact of Brexit on investment banks, but this is becoming the key issue.”
The £8trn sector may be one of the City’s most exposed parts of the City after Brexit, officials are said to fear.
One fund manager spoken to by the paper said that safeguarding delegation – where staff run funds domiciled in other EU countries – should be the “Government’s key priority”, as the FT reports that British officials believe French President Emmanuel Macron has put his weight behind more supervision of delegation decisions.
The Treasury said: “The UK is the pre-eminent global centre for financial services, and the asset management industry plays a pivotal part. We are determined that the UK remains a global hub to this important sector.”