Britain’s financial services industry is calling for a more formal UK-EU partnership, arguing that closer regulatory cooperation would reduce duplication, improve capital flows, and support investment across both markets without rejoining the single market.
UK Finance has published a report, Unlocking Growth Through a Stronger UK-EU Financial Services Partnership, ahead of a July summit between the UK government and EU officials. The trade body wants financial services placed at the core of the wider UK-EU reset rather than treated as a technical side issue.
The report argues that the UK and EU remain deeply interconnected despite Brexit. In 2024, the UK exported £33.7bn in financial services to the EU, while the EU exported €35.7bn in financial services to the UK. UK Finance said both figures have grown by more than 50% since the Brexit referendum.
London also continues to play a central role in European markets. More than 80% of European derivatives and foreign exchange trading clears through the capital, while a fifth of EU-domiciled fund assets are managed in the UK.
According to UK Finance, the absence of a formal framework governing market access and regulatory cooperation remains a missed opportunity. Businesses face duplicated compliance burdens, while capital does not flow as efficiently as it could across the two markets.
The report says its recommendations are not a call for reintegration into the EU single market, wholesale rule alignment, or dynamic convergence with EU regulation. Instead, it proposes a structured financial services partnership built around existing forums, political engagement, regulatory cooperation, and practical measures to reduce unnecessary fragmentation.
The call lands as the government explores how far economic cooperation with the EU can go while maintaining formal Brexit red lines. Labour’s reassessment of closer UK-EU economic alignment has already widened into areas including electricity, emissions, and trade frictions.
Financial services were largely excluded from the original Brexit trade settlement, leaving market access dependent on limited equivalence decisions, local authorisations, and company-specific operating models. Banks, asset managers, insurers, exchanges, and market infrastructure providers have since adjusted to higher regulatory complexity, but fragmentation continues to raise costs for businesses and end users.
Europe’s investment challenge adds weight to the industry’s argument. Both the UK and EU need capital for energy transition, defence, digital infrastructure, supply-chain resilience, and high-growth technology companies. UK Finance argues that a deeper financial services partnership would help mobilise investment at scale by making markets work together more effectively.
That case is being sharpened by weak growth and constrained public finances. Governments on both sides of the Channel are seeking higher investment without relying solely on public spending. Private capital will be needed for infrastructure, transition finance, innovation, and industrial strategy. Regulatory duplication makes that capital harder and more expensive to deploy.
There is also a competitiveness dimension. The EU is pursuing its own capital markets agenda as it seeks to reduce reliance on overseas funding and retain more savings within European investment channels. The UK is pursuing financial services reform, pension capital mobilisation, and scale-up finance as part of its growth strategy. Those agendas can compete, but they also overlap where deeper markets, standardisation, and cross-border investment support both sides.
The political question is how much cooperation can be agreed without reopening the central Brexit arguments. UK Finance is careful to frame the proposal as pragmatic and global rather than a return to pre-Brexit structures. The report says closer EU cooperation should sit alongside the UK’s relationships with the United States, Switzerland, Singapore, the Gulf, and Indo-Pacific markets.
The City’s immediate priority is likely to be predictable engagement, early regulatory dialogue, and a stronger role for financial services in summit-level discussions. Technical forums already exist, including the Joint EU-UK Financial Regulatory Forum, but the industry wants those mechanisms connected to a broader strategic agenda.
The July summit will test whether financial services can move from post-Brexit maintenance into a more deliberate partnership. A full restoration of pre-Brexit market access is not on the table. The more realistic question is whether both sides can reduce avoidable friction while preserving regulatory autonomy.
If that happens, financial services could become one of the more commercially important parts of the UK-EU reset. Without it, businesses will continue to operate in a fragmented landscape where capital, compliance, and market infrastructure work across borders but policy remains constrained by the settlement that followed Brexit.
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