Theresa May and Philip Hammond have called in senior officials from Europe’s largest corporate employers in the UK for talks regarding a post-Brexit relationship with the EU.
The meeting will cover the Government’s plan for the implementation period when Britain leaves the EU. There will be representatives from BMW, Bosch, Kingfisher and the Bank of Ireland present.
Despite the fact that Theresa May insisting that negotiations are going well, investors don’t seem to be entirely convinced and this can be seen in the value of Sterling. If we look at the GBP/EUR exchange rate it currently sits in the 1.11s, the lowest levels for five months.
France’s not so secret agenda poses threat to London’s financial Sector
The French seem to be trying to make the situation as complicated as possible in a thinly veiled ploy to make Paris the centre of European financial Services.
French economic minister, Bruno Le Maire has said there is little chance of Britain securing a free trade deal for the financial sector that would give the UK the level of access they wish for Britain’s largest area of income.
The UK would like a mutual recognition system so financial services will still have access to the EU on the premise that regulatory standards are at the same as current international rules.
Le Maire has stated that UK financial services would be subject to a legal mechanism referred to as ‘equivalence’. Equivalence gives countries based outside the EU limited access to the single market. It is not consistent and can be revoked at short notice which is hardly a situation the UK could deal with.
This does not bode well for Brexit negotiations and the Pound could be set for further falls, the market has already reacted on the rumour as we can see from falls in Sterling value.
It would be wise to keep an eye on developments should you wish to maximise the return on any trade involving the Pound.