Dire future painted for UK banks

London

A DRAFT report on the impact of Brexit on Britain's financial industry warns that banks and staff would "leach" away, undermining the wider UK economy, if they do not have access to European Union markets, according to sources who have read the report.

The report has been written by law firm Freshfields Bruckhaus Deringer for TheCityUK, which lobbies on behalf of the financial sector, and may be published later this month, when Britain formally starts divorce talks with the EU.

Firms are already applying a "base case scenario" that when these talks end in two years' time no access to EU markets will have been agreed, the sources cited the repo…