The flurry of overnight speculation that a deal had been done to guarantee post-Brexit access for the City to the EU was all a bit odd.

It's true that a few weeks ago, the Treasury over the course of a couple of days successfully negotiated some "high level principles" for what the future access relationship might be for UK-based banks and other financial institutions to the EU's single market.

But this is a million miles from a deal - which would not and could not be negotiated in its practical detail for months and even possibly years.

What was broadly agreed - and as I say by the Treasury, not the Department for Exiting the European Union (DEXEU) - was a possible framework to be included in the political declaration that would accompany the Withdrawal Agreement, on the assumption that the problem of keeping open Northern Ireland's border can be overcome and there is any kind of formal Brexit deal at all.

The agreement was broadly made by the Treasury. Credit: PA

To repeat, this was done weeks ago.

As far as I can tell, there has been no momentum on any of it for some time.

But there is something important here.

What matters is that the UK has conceded in the framework or high-level principles for a future financial services deal that power over City firms would rest with Brussels and the EU 27, unless that is, the UK made a political choice that it wanted to do much less financial business with the EU's single market.

An eventual deal would be what's known as an "equivalence" arrangement, where the rules for selling to the EU would be set by the EU - and disputes would ultimately be settled by the European Court of Justice.

City firms have been seeking reassurance on a number of points. Credit: PA

The City of London - responsible for around one tenth of national income, about the same importance to the UK as manufacturing - would be a pure rule taker.

Now as it happens, the City was braced for this.

What City firms wanted was reassurance on a number of points:

  • That because we are still members of the EU and have been following EU directives, the UK's rules would be deemed at the outset to be equivalent to the EU's, and there would be continued full access, unless and until our rules diverge from theirs.

  • The EU could not and would not instantaneously bar UK firms from access to the EU, as and when it arbitrarily decided to do so.

  • There would be a codified, transparent process, with a set timetable, for assessing whether UK financial rules were diverging from the EU's or vice-versa - so that UK firms had time to take evasive action if market access were reduced.

I understand all this has been agreed by the EU.

But that is not much of a surprise, because it is in keeping with the EU's law and lore, and because the UK has also conceded that the ultimate decision on whether market access for the UK should be reduced will rest with the European Court of Justice (apparently most banks in London think that's fine, because they understand how the ECJ works).

But in agreeing to such an "equivalence" regime, the Prime Minister and Chancellor have thrown yet another gauntlet down to the Brexiters of the European Research Group.

Is this in any sense "taking back control"?

Or is this another manifestation of Brexit in Name Only?

I think you know the answer.

It is thought the agreement will anger hard Brexiters such as Jacob Rees-Mogg. Credit: PA

There is growing confidence in the Cabinet that Parliament will ultimately vote for whatever Brexit deal Theresa May ultimately negotiates.

But with every further revelation of the broad terms of the only deal she deems possible, she rubs more salt into the open wounds of the True Brexiters.

There will be tears for someone before bedtime.

The last Budget before Brexit contains next-to-no plan for how the UK will prosper outside the EU. Credit: PA

Ps. You'll remember I pointed out that the last Budget before Brexit contains next-to-no plan for how the UK will prosper outside the EU.

But I've learned this was not for want of trying: the Treasury made discreet calls to the City for suggestions on how leaving the EU could yield a Brexit dividend for financial services.

The replies were, I am told, an embarrassed and collective scratching of heads.

The number of serious ideas conveyed by banks to the Chancellor were of an order of magnitude so close to zero as to make little difference.