European governments have united in saying the UK can't stay in the market and crack down on immigration. German Chancellor Angela Merkel said again yesterday that the negotiations must respect the EU's values, such as free movement of labour.
"Our relations to the UK must remain positive and friendly and frictional losses for the economy must be minimised," Merkel said. "But on the other hand, the 27 member states must stand together and not set standards that would lead to cherry-picking according to whatever they need."
Her government's council of economic advisers called yesterday for "constructive negotiations" to keep Britain in the EU.
"There is still a chance to prevent an exit through constructive negotiations or at least to negotiate a succession agreement which minimises the damage for both sides," the council said.
Cypriot Finance Minister Harris Georgiades said in an interview that his country also wants to keep ties between the EU and Britain as close as possible.
Cyprus, a former British colony, "is keen to participate in the negotiating process to ensure that the relationship between the EU and the UK is as strong as possible after Brexit," Georgiades said in Nicosia.
May could be angling for a rupture with the EU for domestic electoral purposes, academics including Anand Menon, professor of European politics at King's College London, wrote in a report published today.
"Theresa May and her political strategists have made a calculation that they can benefit electorally from a hard Brexit," said Menon. "The government is formulating a combination of seemingly left-wing economic policies - industrial strategy, interventionism and investment - with a right-wing approach to things like migration and social affairs."
Moody's Investors Service said it would cut the UK's credit rating if the government failed to secure continued access to the core of the single market.
JD Wetherspoon Chairman Tim Martin, one of Britain's few pro-Brexit executives, said EU politicians should nevertheless be wary of "bullying" Britain, arguing that could mean his pubs end up selling less French champagne, German beer and other drinks from European producers.
"The ultimate sanction will be in the hands of UK consumers, should they take offence at the hectoring and bullying approach," Martin said.
By contrast, London Stock Exchange Group Chief Executive Officer Xavier Rolet said finance executives are not being alarmist when they threaten to move jobs and operations elsewhere in Europe. He stood by an estimate that Brexit could cost 100,000 jobs in London's derivatives business.
"That whole engine is at risk," Rolet said. "These are real numbers, they are not calibrated to create either a conservative approach or an alarmist approach."
Former Chancellor of Exchequer Alistair Darling also advised May not to favour different industries in the divorce, almost a week after she secured continued investment in the UK from Nissan Motor Co.
"You can't possibly segregate bits of the British economy and say that one matters today, that one can wait for a couple of years" Darling said in a Bloomberg Television interview with Tom Keene.
