(Bloomberg) -- Chancellor of the Exchequer Philip Hammond is set to pave the way for an overhaul of post-Brexit regulation of financial services in the U.K.
In his annual Mansion House speech Thursday, Hammond will say he is launching a review into how financial regulators work together after Britain leaves the European Union, in response to calls from businesses for more “air traffic control” to coordinate the new environment.
“We must maintain our reputation not only as one of the most dynamic and innovative places to do business, but one of the most resilient and agile too,” he will say, according to extracts of his speech. “This review will deliver a regulatory system that continues to enable, rather than stifle, innovation.”
The process will begin with a summit of relevant regulators at his Downing Street office in the coming weeks, and the Treasury plans to call for evidence before the summer, Hammond will say.
Hammond is also expected to warn Boris Johnson and Jeremy Hunt, the two remaining candidates in the contest to succeed Prime Minister Theresa May, not to squander a benign fiscal inheritance by pursuing a damaging no-deal Brexit.
Leaving the EU without a deal to cushion the blow would wipe out the 15 billion pounds ($19 billion) of headroom built into his fiscal plans, money that could otherwise be used for tax cuts or more spending on public services, he is expected to say. Instead, the next government should consider holding a general election or a second referendum in order to break the Brexit impasse.