Brexit transition deal likely to be too late for some banks

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A file photo shows the City of London. Wiki Commons CC BY SA

LONDON (Reuters) – Any binding Brexit transition agreement is unlikely before the first quarter of next year, too late to stop some banks in London from pressing the “relocate” button, a British financial services lobby group said yesterday.

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Britain’s financial sector is concerned that, with EU divorce talks bogged down by failure to agree the UK’s exit bill, time is running out for a transition deal that would be of any use to businesses.

TheCityUK, which promotes Britain’s financial services sector abroad, said the value of such a deal is disappearing by the day and agreement would be needed in the first quarter of next year for financial businesses to reap any benefit and avoid fragmenting markets.

“If they haven’t done so already, most will be ready to press ‘go’ on their contingency plans in the New Year,” said Miles Celic, chief executive of TheCityUK.

“They can still take their foot off the accelerator if a transitional deal is agreed, but without progress soon, it may be too late,” Mr Celic said.

Once businesses start moving, there is no reverse gear and the risk is that jobs and investment will head to Europe, he said. A transition period of at least two years – the preferred option for Britain’s banks – should entail as close to full European market access as possible, he added.

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