Some Treasury officials fear that firms will downsize in London or move away altogether

Treasury officials have privately warned that the UK could face a “black hole” in tax revenue from the City in the event of a so-called hard Brexit.

Senior city figures are preparing analysis which is likely to show the Exchequer losing at least £10 billion a year if the Brexit deal disrupts the ability of banks and city firms to do business in Europe.

The government’s independent watchdog, the Office for Budget Responsibility, will draw up revised forecasts taking into account Brexit for the autumn statement. The banking sector contributes £31 billion in multiple forms of taxation, with more than a third of this dependent on EU access.

Some Treasury figures fear that without a deal to allow these firms continued access to the EU