PRESS: UK won't accept alignment of financial services rules with EU

(Alliance News) - The UK government won't accept alignment of the UK's financial services rules with those of the European Union, Bloomberg reported on Tuesday.

Under the mechanism, the UK would automatically follow EU regulations in certain areas. But as ministers seek to maintain the City of London's independence, Prime Minister Andy Burnham's government does not want it to apply to financial services, UK officials told Bloomberg.

The UK's Labour government is in talks with the European Union to forge closer ties that may include alignment in sectors such as agriculture and energy, but British officials have told EU counterparts that applying it to financial services is a red line they're unwilling to cross, people familiar with the matter told Bloomberg.

The report said while the development will be welcomed by some in the City of London, it also highlights complications involved in Burnham's push for a much closer EU relationship.

"If he were to try to take Britain back into the EU or join its single market, as he has said is possible, he would likely have to sign up to its rules governing financial services," the report noted.

A UK government spokesperson told Bloomberg that it would not provide a commentary on its negotiations with the EU but stressed that Britain's financial services were a key national strength.

Burnham is maintaining the position held by his predecessor Keir Starmer's government, which exempted financial services from a push for closer alignment with the EU, Bloomberg sources said.

They said dynamic alignment on financial services was not included in a paper of common understanding agreed between Starmer's administration and the EU in 2025.

By Jeremy Cutler, Alliance News reporter

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