A top official at the Bank of England has warned the government it has less than 12 weeks to agree a transition deal with the EU to prevent City firms starting to move jobs and business out of the UK.
Sam Woods, a deputy governor at the Bank, said City firms would activate their Brexit contingency plans if there was no deal on a transition period by Christmas which would mitigate the impact of a hard Brexit in March 2019. Woods also repeated his warning of the strain being put on the Bank’s ability to police the financial sector as a result of the changes firms needed to make.
In an annual speech to an audience of financiers at London’s Mansion House, Woods said City firms would become more complicated as a result of the restructuring they would need to undertake.
Lending to UK firms at risk after Brexit, Bank of England warns. His remarks come after a letter he sent in April to 400 City firms to demand they inform the Bank of England of their plans for Brexit, including if there is a hard exit without any trade deals or access to the single market.
A “transition or implementation period” was the most important requirement, Woods said, as he warned that the further away an agreement is from Christmas, the less effective it would be in helping to reassure City firms about the changes they need to cope with Brexit.