TheCityUK, in a press release on 17 October, called:

“on the UK government to make rapid progress on setting out the detail of transition and for the EU to respond quickly and positively, with an agreement to be reached in Q1 2018 at the latest.”

In her speech in Florence last month, Theresa May, the British prime minister, called for an interim accord between the EU and UK that would keep Britain’s status in the bloc somewhat the same for roughly two years after the official 2019 Brexit date. That would allow more time to strike a final agreement.

Since then, negotiators for both sides reported that progress has been too slow in reaching any agreement.

Without a temporary deal in place soon, TheCityUK stated, “more firms will be forced to accelerate their contingency plans, with significant international investment and jobs likely to leave Europe as a consequence.”

Miles Celic, the trade group’s CEO, argued that the short-term deal was just as much in the EU’s interest as Britain’s:

“This isn’t just about business leaving the UK. It is about the very high risk of jobs, capital and inward investment leaving Europe entirely. The resulting fragmented markets will be of benefit to no-one, with costs likely to increase for customers right across the continent.”

In an accompanying paper (PDF), TheCityUK forecast the economic damage if no interim arrangement is reached:   

“Analysis by Oliver Wyman for TheCityUK suggests that if the UK’s future relationship with the EU were to rest largely on World Trade Organization (WTO) obligations with no transitional arrangements in place, 40-50% of EU-related financial services activity (approximately £18-20bn in revenue) and up to an estimated 31-35,000 jobs in the sector could be at risk, along with approximately £3-5bn of annual tax revenues. Taking into account the potential ecosystem impact, the numbers could be as high as 75,000 jobs and £8-10bn in tax revenues. Even if the final UK/EU agreement permits similar levels of mutual market access to the status quo, its positive benefits could be minimal unless transitional arrangements are urgently clarified. Once contingency plans have been implemented, they are unlikely to be unwound: the additional costs of moving business and jobs back to the UK would simply be too high.”