A Lords committee has written to Philip Hammond demanding he seek a post-Brexit "standstill transition period" for the financial services sector.
In the letter the chair of the EU financial affairs sub committee chair Baroness Falkner said it was clear the sector required a period in which the status quo was maintained after numerous hearings from senior figures across the industry.
"Witness, after witness, told us that financial services industry won’t be able to continue servicing cross-border clients after 2019 if a transition period is not agreed by the end of this year," Falkner wrote. "The UK’s financial services industry will be severely hit – as will EU counterparties.
“The more the government waits, the more the value of such a period irreversibly declines. A trickle of banks and insurers have started to implement their contingency plans ahead of access to the Single Market being suspended in March 2019. The government must urgently negotiate a transition period to stop this trickle turning into a flood.”
She added: “The clock is relentlessly ticking."
Although the government has said it is seeking a transitional deal, the Prime Minister has repeatedly referred to it as an "implementation" period as distinct from a "standstill".