Chancellor Jeremy Hunt is in Switzerland to sign a deal that makes it easier for UK and Swiss financial firms to deal with each other.

Trade in financial services between the UK and Switzerland is worth more £3bn.

The government is hoping that the Berne Financial Services Agreement will help that figure grow.

The deal means that Switzerland and the UK will recognise and accept each other’s regulations.

It goes further than the relationship that both the UK and the Swiss have with the European Union.

Mr Hunt insisted that the agreement was only made possible by the UK being outside the EU.

Negotiations have been under way since June 2020 when Prime Minister Rishi Sunak was chancellor.

The bosses of British finance firms have welcomed the fact that the deal is “dynamic”, which means that the relationship will evolve as regulation in both markets changes over time.

Switzerland is home to over $2 trillion in wealth controlled by some of the world’s richest people. It is also a major centre for insurance and re-insurance – which is how insurance companies insure themselves against abnormally large or catastrophic losses.

This is also a key strength of London which is home to Lloyd’s, which is the world’s largest insurance market.

It is understood that getting agreement from the insurance industries in both countries was the trickiest part of the deal.

It is the UK’s third largest non-EU trading partner after the US and China.

Finance chiefs in the UK hope that the Swiss deal will form a model for agreements with other major financial centres – with Singapore mentioned by several people as the next location.

London’s position as the pre-eminent European financial centre has been dented in recent years as trading in shares of European companies has moved to European exchanges including Paris and Amsterdam.

It has also seen a number of high profile UK based companies, including ARM Holdings, move their primary stock market listing to New York.

Meanwhile, Switzerland has seen the collapse of Credit Suisse, one of its biggest and oldest banks.

The signing will provide some cheer for both sides when Mr Hunt and his counterpart Karin Keller Sutter meet on Thursday.

Separate to this financial services agreement, the UK is also currently negotiating a deeper and wider free trade agreement with Switzerland.