The Bank of England boss urged bank chief executives to step up their plans for a no deal Brexit during a private phone call on Tuesday, Sky News is reporting. He is understood to have told banks to intensify their readiness for Britain to leave the bloc on WTO terms.
The UK has already formally left the EU and negotiators on both sides have until the end of this year to agree a deal setting out their future relationship.
EU chief negotiator Michel Barnier confirmed earlier this week the bloc is “open” to a two-year Brexit delay followed tense talks between the UK and EU sides.
But Britain’s chief negotiator David Frost insisted the “firm policy” of the Government remains not to extend beyond the end of the year.
Banks have been told to prepare for a no deal Brexit
Brexit news: Boris Johnson is adamant he will not delay Brexit
Prime Minister Boris Johnson has been adamant he will not seek any extension to the current transition period which ends on December 31, despite warnings the coronavirus outbreak means it will be impossible to conclude a new free trade agreement with the EU by then.
Mr Johnson is expected to fly to Brussels to resume Brexit talks with the EU as trade negotiations judder to a halt.
The Prime Minister will fly in to the Belgian city with Mr Frost to meet the presidents of the European Commission and Council to break the deadlock, reports in The Times say.
Brexit news: Michel Barnier has said Brexit can be delayed by two years
Talks on a new pact to cover everything from trade to fisheries to security from 2021 have reached an impasse before a key deadline at the end of June, when the bloc and London are to assess their progress.
Fisheries have been one of the key stumbling blocks in talks on a new partnership between the EU and Britain, which left the bloc earlier this year and is now in a status-quo transition until end-2020 to allow for talks on a new deal.
Britain left the EU in January and a transition period ends on Decemeber 31.
After that, without a preferential deal, British banks, insurers and asset managers will be limited to the kind of access given by the bloc to the US, Japan and Singapore.
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Bank of England boss Andrew Bailey urged banks to step up plans for a no deal Brexit
Brexit news: David Frost has insisted there will be no Brexit delays
Britain’s financial services minister John Glen has vowed that the country’s financial services industry was “world class” and was ready for whatever Brexit outcome.
He said on webinar: “I continue to believe that we are still well placed as a sector, whatever the specific outcomes are of negotiations ahead of us in the second half of this year.”
While a senior EU official said last week that Britain’s financial services sector should be ready for a no-deal Brexit.
Britain wants binding commitments from the EU on financial market access to avoid the country’s finance industry suddenly being cut off from the bloc, a request Brussels has rejected.
The Brexit timeline revealed
The warning comes after car giant Nissan has warned it will not be able to sustain operations at its Sunderland manufacturing plant if Brexit negotiations fail to establish a trade deal.
The 7,000 workers of the UK’s largest car manufacturing plant rejoiced last week after surviving a global cost-cutting restructuring that saw the closure of the Japanese firm’s Barcelona facility.
A Nissan spokesman said at the time that “Sunderland (remained) an important part of our plans for the European business.”
But in an interview with the BBC, Nissan’s global chief operating officer Ashwani Gupta warned the company would not be able to stand by its commitment to the Sunderland plant if the UK left the European Union without a trade deal that enabled tariff-free EU access.
Mr Gupta said: “You know we are the number one carmaker in the UK and we want to continue. We are committed.
“Having said that, if we are not getting the current tariffs, it’s not our intention but the business will not be sustainable.
“That’s what everybody has to understand.”