Phillip Lane warns of London hit from hard Brexit

There is likely to be a significant flight of financial activity out of Britain if companies are no longer regulated on equivalent terms to those in the EU after Brexit, the central bank governor Philip Lane has told a gathering in London.

Many of the world’s major banks have European headquarters in Britain, but they face significant uncertainty over the country’s future relationship with the EU after its vote to leave the 28-member bloc in June.

Their long-term prospects hinge on what happens to Britain’s access to the EU’s “passporting” arrangement.