• British officials have quietly abandoned hope of securing the government’s promised “cake and eat it” Brexit deal, increasingly accepting the inevitability of a painful trade-off between market access and political control when the UK leaves the EU. Government insiders report a dramatic change of mood at the Department for Exiting the European Union (DExEU) since the general election, with growing Treasury influence helping force ministers to choose between prioritising economic interests or sovereignty. This is in stark contrast to the public position of both main political parties. (Guardian)
  • The UK is examining a potential shortcut to securing a raft of critical free trade deals, giving it potential breathing space to negotiate its own agreements after it leaves the EU. The proposal, involving an associate membership of the European Free Trade Association, could allow ministers to sign up to Efta’s existing free trade deals outside the EU, rather than negotiate them from scratch or fall back on bare WTO terms. Efta, set up in 1960, consists of Switzerland, Norway, Lichtenstein and Iceland. A report by the Swiss thinktank Foraus published this week argues that by joining Efta as an associate member in the manner of Finland, the UK would have access to its valuable free trade deals but would be able to avoid the EU’s rules on free movement. (Guardian)
  • A City of London delegation will head to Brussels this week with a secret blueprint for a post-Brexit free trade deal on financial services, as concern mounts about the damage facing employers if they are forced to move operations to the continent. The initiative, led by Mark Hoban, the former City minister, is independent of government but has the unofficial support of senior figures in Whitehall, according to three people close to the project. (FT)
  • The cost faced by UK banks of restructuring operations because of Brexit could be as high as €15bn (£13.1bn) and is likely to put a “material strain” on those institutions’ earnings over the coming years, according to a new study. Research commissioned by the Association for Financial Markets in Europe and conducted by Boston Consulting Group and Clifford Chance, argues that lenders operating with UK bank licences will most likely have to create subsidiaries within the remaining countries of the EU in order to keep operating as they have done up until now in the aftermath of the split. (Independent)