May stands up for the City in Brexit talks: Prime Minister backs free markets and warns on EU trade

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May spoke at the Bank of England's conference (Source: Getty)

Theresa May yesterday warned against erecting trade barriers between the UK and the EU after Brexit, in a marked change of tone as she swung behind City plans for a deal on financial services.

The Prime Minister emphasised the need for co-operation, as she appeared to back City efforts to push for a deal allowing mutual market access.

Speaking at a Bank of England conference to mark 20 years of operational independence, May said: “It is in neither the EU’s nor the UK’s interest to see these financial services markets fragment.”

May added: “The UK’s financial markets provide support for businesses and consumers right across the EU, reducing the cost of capital and supporting choice and innovation for consumers.”

Read more: Theresa May has warned against "needless" City trade barriers after Brexit

After the latest round of talks in Brussels yesterday, EU negotiator Michel Barnier welcomed “the new dynamic” brought about by May’s speech in Florence. However, in a sign of the ongoing difficulties facing the UK as it inches towards trade talks, Barnier added that “further work is needed” before negotiations move on to the post-Brexit relationship.

“We are not yet there in terms of achieving sufficient progress,” he said, at a press conference in Brussels following the latest round of talks with Brexit secretary David Davis.

May’s speech in the City yesterday came after she took a softer stance on Brexit negotiations last week in Florence, which was welcomed by business groups.

May had previously repeatedly claimed that “no deal is better than a bad deal”, to the consternation of campaigners who are seeking a softer Brexit.

Read more: David Davis says considerable progress has been made in Brexit talks

City lobby groups banded together this week to produce a plan for a broad-ranging free-trade agreement which would provide mutual access for financial services firms in the UK and the EU, under the banner of the International Regulatory Strategy Group (IRSG).

Echoing the IRSG report, May said yesterday she had “confidence” a deal could be reached because of the common starting point of regulations in the UK and the EU.

She said: “The challenge then is not how to bring our rules and regulations closer together, but what to do when one of us wants to make changes.”

“That fact should give us confidence,” she added.

Yesterday, both the Trades Union Congress (TUC) and the Confederation of Business Industry (CBI) urged the government to rule out a “no deal” outcome, saying it could lead to more uncertainty for the millions of EU citizens who live and work in the UK, and UK citizens in the rest of the EU.

Carolyn Fairbairn, director general of the CBI, and Frances O’Grady, general secretary of the TUC, said: “After 15 months of human poker, the uncertainty facing 4m European and UK citizens has become intolerable.”

Read more: Lords committee launches inquiry into cost of Brexit transition period

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