UK lawmakers call for an interim Brexit deal

Britain will need a transitional trade agreement with the European Union, and the government should set out plans for it before beginning formal divorce talks with the bloc, members of parliament's upper house said on Monday.

LONDON (REUTERS) - The UK needs a plan for a transitional trade deal with the European Union. That's the message from the House of Lords on Tuesday (Dec 14).

A committee urging the government to set out plans for an interim deal before beginning formal divorce talks next year.

The House of Lords' EU External Affairs Committee is not convinced a bespoke EU trade agreement can be struck within Article 50's two-year deadline.

It says a temporary deal is vital to protect UK trade and jobs, and suggests staying in the EU customs union.

The committee also suggesting a stop-gap agreement could take the pressure off Brexit negotiations.

Speaking on Monday, Chancellor Philip Hammond agreed.

"There is an emerging view amongst businesses, among regulators and thoughtful politicians that having a longer period to manage the adjustment between where we are now as full members of the European Union and where we get to in the future as a result of the negotiations that we will be conducting would be generally helpful," said Hammond.

Banks and businesses have repeatedly argued the government should agree to a transition period, to avoid a damaging 'cliff edge' or abrupt exit from the bloc.