Bank of England urges Brexit transition deal by Christmas

Posted On: 
6th October 2017

A Brexit transition deal must be reached by Christmas to reassure banks, the deputy governor of the Bank of England has warned. 

Sam Woods is the Bank of England's deputy governor
Credit: 
PA Images

In a stark intervention, Sam Woods said an implementation period must be agreed by the end of the year or high street banks would begin to trigger emergency measures.

Speaking at the annual Mansion House City banquet in London, Mr Woods said: "If we get to Christmas and the negotiations have not reached any agreement on this topic, diminishing marginal returns will kick in.

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"Contingency planning is a sliding scale of increased commitment, investment and momentum through time. It is much more prudent and prosaic than hovering over the relocate button or rushing to the exit door.”

He added: "I struggle to see an outcome in which banks and insurers do not get harder to supervise and harder to resolve for all involved,"

This comes as the Telegraph reveals a looming deadlock over the so called ‘Brexit divorce bill’.

According to the newspaper Britain will refuse to tell Europe how much it is willing to pay to settle its debts as it prepares to leave the bloc.

A Whitehall source said: “There won’t be any political movement from the British side on the bill until the EU broadens its package to discuss transition and the future relationship.”

It follows Theresa May’s pledge in her recent Florence speech to "honour” Britain’s financial commitments to the EU.

The Prime Minister also stated that any transition period would take “about” two years.