The overwhelming importance of the services sector to the UK economy meant that it must be included in any deals struck with the European Union and other markets, he said.

Mr McFarlane said Australia had adopted a similar approach to deals covering both goods and services, making a “conscious trade-off” that it could hit domestic manufacturers such as the car industry.

“For us to be successful over the long-term the guiding principle needs to be for countries to export their competitive advantage and to import others’ competitive advantage,” he said.

“We have the privilege of that situation pertaining in Europe today.

“Anything else would be less.

“The UK’s competitive advantage is services. The UK economy is 80% services and 20% goods.

“Yet there are few precedents on services being included in trade agreements.

“Nevertheless, it would be very difficult for the UK to consider anything other than agreement that covers both, with the EU and with the other markets across the world.”

Mr McFarlane, who is also chairman of financial services industry body TheCityUK, told the organisation’s conference that Australia provided a “good example” of deals involving both goods and services.

He said: “Some years ago it decided it would have an open economy with trade agreements with both goods and services.

“This was a conscious trade-off, recognising that it would, over time, change what is produced domestically and what is imported. [...]

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