UK gears up for battle to save London’s status as financial centre

British prime minister David Cameron and chancellor George Osborne plan to mount a rearguard action later in the day to ensure the continuance of the City of London's status as the world's leading financial centre. The plans for banking union inside the eurozone have put the city's status in jeopardy.

Britain will not join the banking union, the 17 countries in the euro would form a powerful bloc to determine rules for the financial sector under the EU's single market. 

An all-party House of Lords committee has in a report urged the government to gear up for the battle to ensure that London retained its "premier position" in Europe and the world. The report sounded a warning over the banking integration in the eurozone posing a significant threat to the single market.

Osborne will discuss the banking plans with EU finance ministers today, before Cameron seeks safeguards for the City at a two-day summit of EU leaders getting under way tomorrow.

A major concern for the UK is the voting power that the 10 non-euro members should enjoy on the London-based European Banking Authority (EBA), which harmonises rules across the EU.

Under the banking union, the members' roles could be enhanced resulting in weakening of UK' s position over regulations affecting the City.