Germans warn UK banks as Theresa May pleads with US firms

Banks based in Britain will lose access to EU markets after Brexit unless the country remains in the broader European trading group that includes nations such as Norway, the head of Germany’s Bundesbank warned yesterday.

Jens Weidmann, signalling a tough line from Germany on the Brexit divorce talks to come, said Britain would need to be in the European Economic Area (EEA) to keep the so-called passporting rights that allow its banks sell their services across the EU.

The EEA is the trading club comprising the 28 EU states plus Norway, Iceland and Liechtenstein, three non-EU nations who can access the bloc’s single market in return for applying its rules and accepting the free movement of EU citizens.