Thursday 21 March 2019 12:14 pm

No-deal Brexit would 'significantly' hurt the EU, Barclays chairman warns

A no deal Brexit would "very significantly" hurt the EU, outgoing Barclays chairman John McFarlane warned.

The bank's chairman, who will step down in May, also said a financial services deal would be struck between the UK and the EU whatever the outcome of Brexit.

Read more: Bank of England holds interest rates amid Brexit deadlock

"In the event of a no-deal Brexit, it would hurt the EU very significantly," he told a Brexit summit.

Barclays set aside £150m at the end of last year for the impact of economic uncertainty in the UK. 

The uncertainty now looks set to continue after Theresa May asked the EU to extend the Article 50 exit process to 30 June to allow more time for MPs to approve her deal.

The UK will only be granted an extension beyond 29 March if all 27 EU countries agree to the move.

But McFarlane said the EU would be significantly hurt by a no-deal Brexit.

He said the EU and Eurozone appear as if they are becoming a "closed system" in financial services, while London has developed as global financial centre by being open.

"London was never designed, it evolved," he said.

As the Prime Minister battles for an extension, City of London Corporation policy chair Catherine McGuinness said delaying the UK's departure from the EU would just be a "sticking plaster."

"It's imperative we avoid a no-deal Brexit," she said.

Read more: How field marshal May can get out of the Brexit trenches

"An extension would be welcome and let's hope our EU partners agree to that," 

"But it would only be a sticking plaster unless the deep underlying issues are resolved and we actually make progress. To me it feels like we are caught in something of a hamster wheel," she added.