Leading think tank TheCityUK has warned that a so-called "hard Brexit" would cost thousands of jobs.
A report published today by Oliver Wyman on behalf of TheCityUK estimates that, if the UK only secures a low degree of access to the Single Market, it could cost between 65,000 and 75,000 jobs, plus up to £38bn in lost revenue.
The stark warning comes as Brexit minister David Davis, speaking at the Conservative party conference yesterday, said there would only be one overarching Brexit deal, as opposed to mini-deals for each sector. However, he pledged to find a solution to passporting rights for the City.
Reports have also emerged suggesting Theresa May is not willing to give the financial sector any special treatment in the Brexit negotiations and was not keen to provide for transition periods.
The government position prompted concern from the City yesterday. "A strong UK-based financial and related professional services industry is fundamental to a thriving economy, underpinning communities and businesses across the country," warned Miles Celic, chief executive at the TheCityUK.
Andrew Gray, global financial services Brexit leader for PwC, told City A.M.: "Businesses are right to be concerned about the possibility of such a scenario [of a hard Brexit with no transition period] occurring…Businesses should be thinking very carefully about, if that scenario plays out, how might their business be impacted and what is it they should start to do now to protect their business."
Others in the City have also pointed out that the Brexit deal affects the whole of the country, and therefore the financial services sector should not be expecting any special treatment.
"Every organisation in every sector that is a significant employer and a significant contributor to UK GDP is entitled to have an influential seat at the table," said Anthony Belchambers, chairman of the Honorary Advisory Council of the Financial Services Negotiation Forum. "There's no question of that. But that applies to all major sectors."