The Guardian reports: European diplomats are increasingly convinced the UK will sever economic ties with the continent when it leaves the European Union, as hopes of a special partnership languish.

As the European commission’s chief Brexit negotiator, Michel Barnier, prepares to start work on Saturday, the dominant mood among senior diplomats is that the UK is on the path to “hard Brexit”, namely giving up membership of the EU single market, as well as the customs union that allows free circulation of goods.

Under this clean-break scenario, London-based banks would lose the passports that allow them to operate across the continent, while Britain’s trade would be governed by a new agreement yet to be defined. [Continue reading…]