Is a hard Brexit looking increasingly likely?

Brexit secretary David Davis
There are suggestions David Davis favours leaving the Single Market (Source: Getty)

Alex Deane, common councilman in the City of London Corporation and managing director at FTI Consulting, says Yes.

Those obsessing about “the deal” we get with the European Union miss some basic truths. People and companies trade with one another, not nations.

We are highly successful in economic relationships entirely without a trade deal: we have no free trade deal with the US (perhaps because of our EU membership) but they are nevertheless our largest investor, and we are theirs; China and Japan have no free trade agreement with the EU and yet trade with it highly successfully.

A so-called “hard Brexit” may well come about (one pities the negotiators on the other side, mandated by a plethora of institutions plus 27 states). If so, that’s fine. While it would harm our friends on the continent much more than us (as we are net importers of goods from the EU on a massive scale), they may yet choose that path and, if so, so be it.

We should be entirely unafraid of WTO-plus rules. No deal is better than a bad deal.

Iain Anderson, executive chairman at Cicero Group, says No.

While everyone got in a lather last week about what Brexit really means, there are strong signs emerging that the government knows a soft Brexit is the best Brexit the UK can have.

The clear economic self-harm that would flow from a hard Brexit is obvious to all but the most messianic leavers.

Both Prime Minister Theresa May and chancellor Philip Hammond have made clear at the G20 and in parliament that access to the Single Market remains a vital option on the table. But that option will take some real time to negotiate.

It is good news that the Treasury will be asserting its role as the lead negotiator for the City. It is also clear that even Sir Humphrey at the Department for Brexit has a clear reporting line to Number 10. Call it control freakery – right now, I just call it sensible.

Let’s not give markets an excuse to freak themselves out further, and let our new Prime Minister deliver the safest Brexit we can have.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.