German government officials have reportedly said that any trade deal between the UK and the EU can only include financial services if the UK pays ‘substantial’ amounts into EU budget and continues to follow EU law.

The comments emerged as UK Chancellor Philip Hammond and Chief Brexit negotiator David Davis travelled to Germany to highlight the important relationship that exists between the UK and Germany. The strong German stance might thwart the UK’s hopes that a bespoke trade deal can be agreed when the negotiations on the future relationship between the EU and UK begin.

The EU has said from the outset that the UK cannot ‘cherry pick’ aspects of EU membership. Norway and Switzerland, both non-EU countries have some access to the EU’s Single market but they have to pay into the EU Budget. But the UK has reportedly ruled out a Norway-style arrangement.