The European Union is preparing to remove the European Banking Authority from London, a decision that will likely cost hundreds of jobs.
The Observer also reports that the European Medicines Agency will also be removed, and a 'beauty' contest will be held to determine which cities will host the two agencies in future.
The two agencies, whose future homes are likely to be decided by June, employ around 1,000 people and are likely to prompt a fierce bidding war between several European cities including Milan, Amsterdam and Frankfurt.
It is also reported that Theresa May's request for early trade talks has been flatly rejected by all 27 remaining EU member-states, a further blow to Britain and its chances of securing the best possible deal in severance negotiations with the bloc.
The remaining member-states are reportedly unanimous in the belief that Britain must settle its 'divorce bill' with Brussels, which some estimates believe to be worth around €60 billion, and resolve the rights of EU citizens before any negotiations can take place.
Several EU member states have talked of giving Britain a tough deal in light of Brexit, although some have taken a softer tone ahead of the negotiations.