The European Union's chief negotiator says it is inevitable that British financial institutions will lose the passports that allow them to trade freely within the bloc.
ADVERTISEMENTAnother day, another apparent disaster for Britain's Brexit plans.
This time, it's Michel Barnier's announcement that the much-hoped for special deal between the City of London and the European Union will not be possible, scuppering Prime Minister Theresa May's plans for a bespoke trade agreement with the bloc.
According to a Guardian newspaper exclusive, Barnier told reporters that British banks and financial firms would inevitably lose the passports that allow them to trade freely in the EU.
UK Brexit secretary David Davis had called for a "Canada plus plus plus" deal with the bloc, referring to the free trade agreement struck between Ottawa and Brussels last year, but with the crucial inclusion of financial services.
The setback comes just days after EU leaders agreed to move on to phase two of the Brexit divorce talks.
Having agreed that enough progress had been made with regards to citizens' rights, the Irish border and the Brexit financial settlement, negotatiators will now move on to the pivotal matters of trade and security.