City faces a Brexit ‘nightmare’ unless a deal is done by Christmas, says new lord mayor

The new lord mayor of London has said banks and insurers will face an "administrative nightmare" unless a Brexit deal is secured by Christmas.

Former Barclays executive Peter Estlin told the Sunday Times that there was a "huge amount" of anxiety in the City despite recent suggestions that the Prime Minister was closing in on a deal.

Earlier this month City minister John Glen said he was “extremely confident" the two sides would reach an "imminent deal" for the financial services sector, but his comments were downplayed by Treasury sources who said a deal was still being worked out.

Estlin said: “It’s not done until the fat lady sings. If we don’t have real clarity by Christmas we have to work to protect consumers and households, particularly on this side of the Channel but also in Europe.”

Figures released by the European Commission earlier this week predicted UK growth could drop to just 1.2 per cent next year, making it the slowest-growing EU member alongside Italy.

The commission's forecasts for 1.2 per cent GDP growth in the UK over the next two years differ from the Office for Budget Responsibility's prediction of 1.6 per cent growth next year and 1.4 per cent growth in 2020.