There is no reason for the City of London to remain a centre for euro clearing if Britain leaves the European Union's single market, and other financial centres in the EU should get ready to carry out these transactions, French president Francois Hollande said.

"As soon as Britain leaves the European Union's single market, if it decides to do so, there will be no reason for the euro zone to allow a non-member country to continue carry out transactions in euro," Mr Hollande said after a European Council in Brussels.

“Where will these transactions go? There are other trading places in Europe,” he said. “I want European trading places to get ready to carry out these operations that eventually won’t be done in the UK,” he added.

The Socialist president also downplayed the French audit office’s warning on Wednesday about a possible overshoot of France’s deficit target in 2017, saying the body was inherently sceptical of government targets.

“The Cour des Comptes doubts, therefore it is,” he said, adding that if growth reached 1.7 per cent as Paris expects in 2017 and the government was extremely careful in its budget execution, the 2017 deficit target will be met.

Reuters