The government must urgently spell out its aims from the second phase of EU negotiations and on transitional arrangements, the Lords EU Financial Affairs Sub-Committee has warned.
The committee has warned of market fragmentation and financial instability if the UK loses access to the EU through no deal, particularly damaging Britain's financial services industry.
Goldman Sachs boss Lloyd Blankfein, for example, warned this week that it is reaching a point in contingency planning where it will be too late to stop the group from leaving the UK.
Responding, Liberal Democrat leader Vince Cable said:
"This is a serious warning from a respected committee. Philip Hammond's comments this week that the UK and EU economies will diverge only 'very modestly' shows he is desperate to reassure the City that nothing is really going to change.
"But obviously things will. Serious business people will, therefore, be assessing their options, including whether or not to relocate to other EU countries.
"The Conservatives must stop their infighting and at least draw up some kind of coherent plan on what they want from Brexit talks."