Single Market access must be maintained for sake of the City, report argues

 
Hayley Kirton
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The report calls for Single Market access to protect the status of the City (Source: Getty)

Access to the Single Market must be maintained for the sake of the financial sector, argues a new report, details of which have been revealed today.

In particular, the draft of the report from financial industry body International Regulatory Strategy Group (IRSG), which has been produced by law firm Hogan Lovells and lobbying group TheCityUK, warns loss of passporting rights could wobble London's standing as a financial capital.

The report also cautions on the importance of no new barriers being put in place between the UK and EU, noting: "Failure to do so would reduce stability, and hinder markets in their role of channelling savings into investment and of creating jobs and growth."

Read more: Senior Tory MP demands the detail in May's Brexit plans

The contents of the report, which were seen and first reported on by Sky News, have been revealed just a day after Prime Minister Theresa May dropped some of her strongest hints yet that the UK would not hold onto its Single Market membership post-Brexit.

"We are leaving. We are coming out. We are not going to be a member of the EU any longer," May told Sky News.

However, she went on to note the upside of that would be an "ambitious trade deal" with the Single Market and added: "And that's for both goods and services, because of course for the UK, financial services – and the services sector generally – is a very important part of our economic relationship with the EU."

Read more: Top City bosses set for a Brexit grilling from MPs tomorrow

Last month, Brexit secretary David Davis and chancellor Philip Hammond joined forces to meet with City bosses for a roundtable at the Shard. A Square Mile source indicated to City A.M. at the time that the meeting showed signs of improved coordination across the two departments and increased willingness to listen to the needs of the industry.

City A.M. understands the IRSG report is still being drafted and is currently due to be finalised later this month.

The draft report also calls on ministers to conclude transitional arrangements with the EU quickly to make sure the sector has some continuity in its access to the Single Market while the negotiated settlement is still coming into force.

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