UK Scrambles to Secure Financial Services' Future After Brexit

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"We need more than 1% of European GDP, quite clearly, if we are to pursue European policies and fund them adequately", Juncker told a conference in Brussels.

But as the two senior ministers landed Brussels' chief Brexit negotiator Michel Barnier urged European companies with commercial links to the United Kingdom to start preparing for increased "friction" in trade.

It's the latest sign of Mr Hammond's tough-talking approach with Brussels after facing widespread criticism from Tory MPs of his anti-Brexit stance a year ago.

Verhofstadt said: "Businesses' uncertainty has been created, on both sides of the channel, because of the United Kingdom government's decision to check out of the largest single market in the global economy, not because of the EU's contingency planning".

EU Budget Commissioner Guenther Oettinger told reporters in Brussels on Wednesday that United Kingdom payments after Britain's planned post-Brexit transition phase ends in 2021 were a matter for the negotiations but that "the United Kingdom could reflect upon" how Switzerland pays to participate in some European projects.

Putting behind us any narrative of "punishment" for leaving and focusing on the mutually beneficial relationships we have now and can continue in the future, the European Union will send a message to the British people which will resonate as they consider the options for their future.

"They say 'it takes two to tango, '" Hammond said.

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He said the commission plans to plug the Brexit blackhole 50 percent by new contributions from member states, and the other 50 percent by cutting existing projects.

Finance sector chiefs have long advocated an implementation phase after Britain leaves the European Union as planned on March 29, 2019, to avoid disruption as both sides adjust to a new trading relationship.

The officials - who work in two key government departments in Berlin - told Bloomberg that Germany will reject any "cherry-picking" by Britain.

"Of course we know PG Tips started in Manchester and is now owned by an Anglo-Dutch company - it's a ideal example of how Europe and the United Kingdom can work together in future in terms of trade, but not necessarily politics".

Theresa May's cabinet held its first formal discussion of the so-called "end state" for the Brexit talks before Christmas, with rival camps favouring a closer, Norway-style relationship and the looser "Canada plus" approach favoured by the Brexit secretary, David Davis.

The Morgan McKinley report is one of the starkest data points yet showing how hiring has slowed as firms struggle to get clarity on what access they will have to Europe's financial markets following Brexit.

The meeting came after London Mayor Sadiq Khan warned that Britain would be shunted into a "lost decade" of low investment and shed nearly 500,000 jobs if it fails to agree a trade deal with the EU.

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