It has been widely reported that the financial services industry will be seriously affected by the loss of the EU single passport system. The impact will depend on the size and nature of the business, but it is perfectly possible to service EU-resident clients form a UK office. Given that the service will be provided from within the UK, no passport would be required for that purpose. Financial services institutions must therefore review the extent to which they can adequately service their EU client base from the UK. If that is not feasible, then they may have to establish separately-capitalised local subsidiaries in an EU Member State, and passport from there.

Manufacturing and other industries may face different challenges. They will have to continue to adopt EU standards applicable to their products and will still be able to export to EU customers. However, the UK’s departure from the single market and the customs union will add paperwork costs (e.g. in relation to third country content) and will also subject such exports to the EU’s common external tariff. Some of those costs may be offset if the realities of Brexit lead to a permanent depreciation in the value of sterling. For some companies, the loss of tariff-free access to the single market could be seriously prejudicial to their competitive position, and some may feel compelled to move manufacturing capacity to the continent. This, of course, will be one of the real tests of the success – or failure – of Brexit.

If no EU deal can be struck, then the UK may need to adopt a more aggressive approach. For example, it could unilaterally declare the UK to be a free trade area and seek to encourage other countries to trade on a reciprocal basis. And Mrs May has already noted that deep corporate tax cuts could be used to attract inward investment. These initiatives would also be consistent with the UK’s strategy to reassume sovereignty over its own affairs, and to strike out into the world as an open free trading nation. These are high-risk strategies, but they could conceivably bring high rewards.

Charles Proctor is a Partner at Fladgate LLP, London