The U.K. government and the European Union have agreed a trade deal to replace current arrangements which end on New Year’s Eve when the Brexit process is completed.
Britain left the European Union on Jan. 31 but kept EU legislation during a transition period this year. EU law will no longer apply in the U.K. from Jan. 1. The U.K. voted to leave the EU in a June 2016 referendum and politicians have spent four tumultuous years trying to agree new terms for the country’s relationship with the remaining 27 nations in the EU bloc, its largest trading partner.
London’s financial markets prospered in the last four decades as the U.K. capital became the pre-eminent EU hub for lending, trading and investing.
Now outside the EU, the future size and influence of the city’s finance industry is in question. The financial services sector has the biggest trade surplus of any industry in the U.K., with exports in 2019 of £79 billion, equivalent to $106 billion.