Brexit trade deal without services would not be 'fair': Hammond

LONDON: British finance minister Philip Hammond said Wednesday that a free trade deal between London and the European Union that does not include the financial services industry would not be "fair".

Hammond, making a keynote speech in London, urged Brussels to seek a bespoke free trade agreement for Britain, adding it would be in their "mutual interest" to include the key sector.

"A trade deal will only happen if it's fair and balances the interest of both sides," Hammond said, hours after the EU had rejected Britain's calls for completely free trade following Brexit.

"Now, given the shape of the British economy and our trade balance with the EU 27, it's hard to see how any deal that did not include services could look like a fair and balanced settlement.

"Not only this is possible to include financial services in a trade deal, but this is very much in our mutual interest to do so."

He spoke hours after the EU on Wednesday flatly rejected the idea, not for the first time, by again declaring that there would be "no cherry-picking" for London.

Questioned about the bloc's latest negotiation guidelines, which also warned of "negative economic consequences" as a result of Britain's vote to leave, Hammond replied:

"It does not surprise me remotely that what they have set out this morning is a very tough position. That's what any competent, skilled and experienced negotiator would do."

Chancellor of the Exchequer Hammond added that there were "legitimate" worries about the region's financial services sector following the nation's departure from the EU in March 2019.

"There will be many legitimate concerns: concerns about the policing of rules once we are separated legal jurisdictions, concerns regarding the legal framework for regulatory and supervisory cooperation, concerns regarding the implications for financial stability and for the operations of the eurozone monetary policy.

"We stand ready to engage on all of these issues."