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The study, compiled by the London School of Economics with input from business leaders, ex-policy makers and academics, says the U.K. needs to retain near-equivalent European Union passporting rights and warned that alternatives are “costly and time-consuming.”
It sets out a list of recommendations for Prime Minister Theresa May’s administration to bolster growth, including prioritizing free-trade deals with the U.S. and EU. It also encourages the government to boost skills, develop an industrial strategy, and increase competition in finance.
[...] The loss of those rights may entail a reduction of over 25 percent in the U.K.’s total financial services trade, the LSE said in its Growth Commission Report.
“Brexit poses a threat to the pre-eminence of the City of London,” the group said, referring to the capital’s banking center. “The major threat for financial services trade is the loss of passporting rights.”
While the U.K. government has made some “welcome” progress on trade deals with Canada and Australia, May must prioritize deals with Britain’s largest trading partners, the EU and the U.S., the LSE said. Striking a U.S. free-trade agreement with a focus on reducing non-tariff barriers may provide a blueprint for other bilateral negotiations, it said.