Chancellor Philip Hammond has said that financial services will not suffer from the government’s new Brexit deal despite watering down key plans for the City.
Hammond had set out for a “mutual recognition” deal for the City, but has now confirmed this does not feature as part of the government’s current proposition for a UK relationship with the EU.
Instead, granting financial services more regulatory autonomy, but with less market access, is a “pragmatic solution” that “works for the UK, works for the EU and works for business”, the Chancellor writes for the Financial Times.
Hammond says the deal gives “sufficient stability and certainty for the market”, but it has been described as a “real blow” by City figures who say that the “association agreement” proposed does not go far enough.
Confederation of British Industry employer’s body head Carolyn Fairbairn tells the Financial Times that while the proposals were a “step forward, particularly on goods”, areas such as insurance products could be negatively hit by looser regulation.