The European Union will extend the period during which UK institutions can continue clearing euro derivatives trades in the unlikely event of a no-deal Brexit, giving the industry an extra year to prepare contingency plans.

The risk of Britain exiting the bloc without a withdrawal agreement governing the transition period receded sharply following the Conservatives winning a majority in yesterday’s election, but it still exists if prime minister Boris Johnson somehow fails to get his deal through Parliament after the Christmas break. The UK is scheduled to leave the EU on January 31.