Brexit mess leaves UK financial sector reeling

Damage to City of London may take 10 years to fix, with Britain emerging as Europe’s hot heads

Mismanagement of Brexit has made Britain the new “hot heads” of Europe and caused damage to its valuable financial services industry that will take at least a decade to repair, the City of London’s policy chief said.

Brexit poses the biggest challenge to the City since the 2007-09 global crisis as it will probably lead to banks and insurers losing full or partial access to the European Union, the world’s biggest trading bloc.

Catherine McGuinness said banks, insurers and asset managers in the ‘Square Mile’ financial district were pushing ahead with setting up new hubs in the European Union by March, without waiting to see if parliament votes through a divorce settlement.

The prospect of lawmakers voting through the deal first time next Tuesday appears slim, raising the likelihood of a ‘hard’ Brexit which throws up greater trade barriers for financial firms.

“People realise it is going to be very turbulent whatever happens,” McGuinness said.

“The worst-case scenario would be no-deal happening by accident or design.”

The City is exasperated with the uncertainty surrounding Brexit, which has hurt Britain’s image abroad and will time to rebuild, she said.

“We do travel the world quite extensively and I do find people asking what is going on in the UK, saying ‘you used to be so statesman-like and rather boring, and now you seem to have become the hot heads and hot bloods of Europe’,” she said.

The uncertainty for Britain’s largest economic sector would continue, whether a transition deal starts next March or if Britain crashed out of the bloc, McGuinness said. take