Brexit deal welcomed by financial services

Brexit deal welcomed by financial services

Figures in the financial services sector have welcomed the Brexit deal and the prospect of continued "cooperation" between Britain and the European Union.

Last night the cabinet approved the deal struck between the European Union and the UK earlier in the week.

The deal includes the basis for a transition period which will start after Britain leaves the EU on March 29, 2019 and last for 21 months, during which time the UK must abide by European laws such as Mifid II and the GDPR.

If more time is needed to reach a long-term deal, the transition period can also be extended.

Meanwhile, a summit is to be held on November 25 to discuss the deal.

An outline political declaration on the future relationship between the EU and Britain was also published, which highlighted the importance of financial services.

Miles Celic, chief executive of lobby group TheCityUK, said: "The importance of financial services has been acknowledged and its inclusion in the political declaration means that this sector is hardwired into the future negotiations. It also recognises that this is in the mutual economic interests of both sides and – most importantly – of customers.

"It’s encouraging that the declaration is grounded in the principles of regulatory autonomy, transparency and stability, and underpinned by close and structured cooperation. The industry will also welcome the clarity on the legally-binding transition period."

Catherine McGuinness, policy chairman at the City of London Corporation, said: "The commitment to close regulatory and supervisory cooperation is a positive move that recognises the need for any deal to reflect the City’s unique role in providing services to households and businesses across Europe.

"A no-deal Brexit would be in nobody’s interests. Politicians on both sides now need to see through an agreement that benefits both the UK and the EU."

The deal also includes a provision for a backstop, which means a single EU-UK customs territory will be established, which will apply from the end of the transition period until a subsequent agreement becomes applicable.

This was included to solve the issue of the border to Northern Ireland, where both sides are seeking to prevent a hard border with the Republic of Ireland.

Speaking in Downing Street last night, Prime Minister Theresa May said: "When you strip away the detail, the choice before us is clear. This deal which delivers on the vote of the referendum, which brings back control of our money, laws and borders; ends free movement; protects jobs, security and our union; or leave with no deal; or no Brexit at all.

"I believe that what I owe to this country is to take decisions that are in the national interest, and I firmly believe with my head and my heart that this is a decision which is in the best interests of our entire United Kingdom."

The cabinet approved the deal after markets had closed last night and the FTSE 100 opened higher this morning, up 0.07 per cent, while the pound is down slightly by 0.06 per cent to $1.29.