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International

Priorities for advancing UK-EU relations

A pragmatic path to a stronger relationship in financial and related professional services

15 July 2026
5 minutes
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This report sets out a comprehensive, industry-led agenda to strengthen UK–EU cooperation in financial and related professional services. We undertook a thorough process of consultation with our members to inform this research, which focuses on practical, deliverable measures to reduce friction, improve predictability and support shared European priorities through more efficient outcomes across the European financial system and wider economy, while fully respecting the regulatory autonomy of both sides and keeping open a credible path to more ambitious long-term outcomes.

In 2024, the EU accounted for
over one third
of UK financial services trade; in the same year, the UK accounted for around one fifth of EU financial services trade

he UK’s stock of outward FDI in EU financial services totalled
£157.2bn
in 2024 (30% of UK outward FDI in the sector)

The EU’s stock of inward FDI in UK financial services stood at
£152.3bn
(26% of UK inward FDI in the sector)

Financial and related professional services exports to the EU grew by
42%
between 2020 and 2024, from £35.1bn to £49.7bn

UK services exports grew
64%
from 2020 to 2024, reaching £506.4bn with financial and related professional services accounting for over one third of total UK services exports

UK capital markets are
almost twice as deep
as those of the EU, despite the EU’s larger headline market size

Financial and related professional services industry’s objectives

Objective: Further build trust and collaboration in the UK–EU financial and related professional services relationship

Why this matters
Fostering relationships between key officials and building trust, is key to achieving deeper collaboration.

How it could be achieved
Continued utilisation of the Joint UK-EU Financial Regulatory Forum and other bilateral engagement mechanisms for this purpose.

Level of ambition
Base-level ambition: deliverable now.

Objective: Improve coordination on technical matters

Why this matters
Interoperability improves efficiency and should be considered a foundational baseline of the future relationship. Recent cooperation on accelerated settlement (T+1) shows what is possible in a low ambition environment when both sides engage early on technical issues.

How it could be achieved
Better use of the Regulatory Forum to advance further technical cooperation on parallel reforms (e.g. settlement cycles, reporting, data, and digital frameworks); greater cooperation/ coordination in international standard setting bodies.

Level of ambition
Base-level ambition: deliverable now.

Objective: Reduce mobility frictions for UK and EU financial and related professional services professionals

Why this matters
Efficient short-term mobility is essential for service delivery, client engagement, and exports. Current frictions delay projects, increase costs, and reduce competitiveness.

How it could be achieved
Pursue e-gate access prioritising business hubs; use existing structures (TCA frameworks, Services, Investment and Digital Trade (SID) Committee, dedicated dialogues on short term business mobility and the recognition of professional qualifications) to expand permitted activities for short term business visitors. Agree reciprocal youth mobility arrangements with the EU. Under a higher ambition scenario agree further pragmatic, business focused fixes to challenges faced by professionals based in the UK and EU alike.

Level of ambition
Modest ambition: deliverable with mutual political will.

Objective: Achieve more effective mutual recognition of professional qualifications (MRPQ)

Why this matters
Current TCA MRPQ mechanisms are slow and have delivered limited outcomes, constraining exports of key professional services.

How it could be achieved
Immediately pursue better use of existing MRPQ frameworks, while exploring more effective models based on recent UK agreements (e.g. Switzerland) that deliver meaningful outcomes under a higher ambition scenario.

Level of ambition
Modest ambition: deliverable with mutual political will.

Objective: Counter restrictiveness – avoid further regulatory ratcheting and market fragmentation

Why this matters
Fragmented capital markets increase the cost of capital and limit Europe’s ability to finance growth, innovation, energy transition, and strategic priorities. Continued tightening of third country regimes raises costs, reduces market depth and undermines European competitiveness, to the detriment of European citizens and businesses.

How it could be achieved
Cooperation on shared growth and competitiveness agendas, including simplification initiatives and coordinated capital markets reforms, using existing bilateral and multilateral forums.

Comprehensive and systematic identification of emerging initiatives via the Regulatory Forum; support earlier testing of cross-border impacts; actively reduce any conflicts of law and practice that may constrain business access to finance; promotion of a shared ‘do no harm’ principle

Level of ambition
More challenging, but deliverable within existing framework.

Objective: Remove EU ‘cliff edge’ risks (data adequacy and Central Counterparty (CCP) equivalence)

Why this matters
Time limited decisions create unnecessary uncertainty and systemic risk, increasing costs for firms and markets on both sides.

How it could be achieved
Secure robust, longer term, non-time limited solutions, emphasising financial stability and mutual economic interest.

Level of ambition
More challenging, but deliverable within existing framework.

Objective: Closer UK–EU cooperation on defence and resilience financing

Why this matters
European defence and security is a common economic security imperative and strategic objective. Scaling Europe’s defence industrial base cannot be achieved through public funding alone; excluding UK capital markets and cross-border lending raises costs and slows delivery.

How it could be achieved
Use Leaders’ Summits, security partnerships, and structured bilateral dialogues to prioritise removing barriers to cross-border private finance, especially as it relates to defence financing.

Level of ambition
More challenging, but deliverable within existing framework.

Objective: Best-in-class deep collaboration in wholesale financial services

Why this matters
Streamlines wholesale cross-border financial operations, reduces barriers, reduces cost of capital, and enhances market confidence.

How it could be achieved
Outcomes-based mutual recognition or other durable wholesale market access model.

Level of ambition
High ambition – a vision for the future.

The UK-EU Leaders’ Summit and the subsequent Common Understanding (2025) were heavily weighted, like the Trade and Cooperation Agreement (TCA), in favour of streamlining trade in goods, not trade in services. Re-balancing is vital for many reasons, not least that Europe’s security, defence capability and economic resilience are increasingly interconnected. While the UK government is currently focused on improving the UK-EU relationship by prioritising goods trade and seeking automatic dynamic alignment for greater market access, our industry is clear on the following:

  • The UK and the EU must work together to address their many major shared challenges, including ongoing conflicts and the resulting increased defence procurement and funding needs; demographic shifts; energy transition; scaling up of Europe’s innovative businesses; and increasing geopolitical tensions and regionalisation of global trade.

  • Given the contribution that the financial and related professional services industries of the UK and the EU can make towards meeting these shared challenges, we urge that the industry and its priorities should be included as a central topic at future Leaders’ Summits and in any future iterations of the Common Understanding or similar agreements.

  • Crucially, almost all the priorities contained in this report are within the reach of both the UK and EU without any need to change the texts governing their existing UK-EU relationship (the Withdrawal Agreement, the TCA, and the Memorandum of Understanding (MoU) on financial regulatory cooperation). While we have framed our proposals deliberately in this way to maximise the potential for deliverability, we are clear that ambition on financial and related professional services could be even higher than the options we outline and more ambitious mechanisms involving framework change could also be considered.

  • Automatic dynamic alignment of rules, as is being pursued for Sanitary and Phytosanitary (SPS) / Agri-food regulation, is not appropriate for the UK’s financial and related professional services industry. As a large, diverse, and highly innovative industry, which combines globally systemic characteristics with unique competitive strengths, our ecosystem requires the UK regulatory authorities’ speed of decision taking, flexibility and agility, and could not operate effectively under arrangements that require it to automatically follow the lead of another jurisdiction with different priorities and needs.

  • Any wider proposals that go beyond cooperation – such as rejoining the Single Market or entering a Customs Union – need careful and separate consideration of their merits and challenges.

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