City welcomes Theresa May's "honest" Brexit speech - and so does Barnier

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Theresa May's latest speech setting out her vision for the future of trade after Brexit has been welcomed by the City as substantive and honest - and it even got the thumbs up from EU negotiator Michel Barnier.

Speaking at Mansion House this afternoon the Prime Minister said the UK would make some "binding commitments" in order to secure a bespoke free trade agreement, but pressed the EU to offer a compromise too. She also said financial services must be included in any deal.

The pound fell during her speech, and is down 0.4 per cent against the euro.

But it received broad backing from business and finance groups.

The City of London Corporation's policy chairman Catherine McGuinness said it was "a step towards an ambitious free trade agreement"

“The Prime Minister is right: UK should look to secure a bespoke deal with the EU. An off-the-shelf model would do a disservice to the deep level of integration the UK and EU currently share."

Miles Celic, chief executive of TheCityUK, added: “The Prime Minister has today set out an ambitious and pragmatic vision for a mutually beneficial relationship between the UK and the EU. She made a detailed and practical proposition and it should put to rest any suggestion that the UK has not made its intentions and ambitions clear. We hope to see the EU respond positively and constructively to what the PM has proposed and allow negotiations to move forward."

Iain Anderson, chairman of financial lobby firm Cicero, told City A.M.: “This is an honest and realistic speech from the PM - no more cake and eating it. It’s a substantial speech and deserves a positive response from EU leaders.”

Adam Marshall, director general of the British Chambers of Commerce (BCC), added: “The Prime Minister was clearer and more realistic than ever before on the political choices and economic trade-offs ahead.

“The practical issues that matter for business and trade must now become the absolute priority. The time for high-level statements is over, and attention must now turn to the painstaking process of getting the details right."

Stephen Martin, director general of the Institute of Directors, agreed.

“Business leaders will welcome the Prime Minister’s honest admission that negotiating the future UK-EU relationship will involve making difficult choices," he said. "The Prime Minister put forward an ambitious vision for this new partnership, both in terms of access and sectors. It is important that she explicitly referenced the need for binding commitments in areas such as state aid and competition policy, which the IoD has long called for. Her acknowledgment of the need for new labour mobility arrangements will also strike a positive chord with businesses."

Even Remainer rebels within May's party also backed the speech.

Nicky Morgan tweeted that it was a "very welcome tone... of realism, compromise, recognition that we are in negotiation with EU & can't ignore some hard facts as well as a desire to unite the nation & build an enduring economic partnership with the EU".

She added: "The EU cannot say now it doesn't know what UK wants."

Barnier, who earlier this week was in a more combative mood, tweeted that he also welcomed May's speech for its clarity on leaving the Single Market and customs union "and recognition of trade-offs", which would inform the European Council's future guidelines.

But Manfred Weber, a key ally of Angela Merkel said the speech had made him "even more concerned" and accused the UK government of "burying its head in the sand".

Guy Verhofstadt, who leads the European Parliament's Brexit steering group, was similarly unimpressed.

"Theresa May needed to move beyond vague aspirations, we can only hope that serious proposals have been put in the post," he said. "While I welcome the call for a deep and special partnership, this cannot be achieved by putting a few extra cherries on the Brexit cake."

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