Germany’s finance minister has said he is confident his country will not suffer from Brexit but that Britain will inevitably face “consequences” from its decision to leave the European Union.

At a panel at the World Economic Forum in Davos, Switzerland, Olaf Scholz said Britain’s financial sector will not be as important to the EU after Brexit as it is now.

Britain is set to leave the EU in a week’s time but will remain within its tariff-free single market and customs union until the end of the year to smooth its exit.

Mr Scholz said a non-member cannot have the same advantages as an EU member and that will be an important factor in upcoming trade discussions between the EU and Britain.

“That is something that will have to be balanced,” he said.

“I think we will have solutions but, sure, there cannot be a special competitive advantage from being outside.”