Nick Sarkozy has pulled out.

He was planning a visit to the City for a kind of diplomatic mission to repair any misunderstandings his comments may have created.

Nearly headless Nick Sarkozy is of course a fan of the City, and loves its financial institutions and the Anglo-Saxon way.

Even so, Downing Street was not so sure. According to the FT, it managed to “convince the Elysée palace that a visit by the French president in the midst of a political backlash could be counter-productive.”

Well, that was an understatement if ever there was one.

This is what Angela Knight, Chief Executive at the British Bankers Association had to say on the matter.

“Monsieur Sarkozy must surely recognise that he has undermined the EU with his statements and put a question mark over the impartiality of his nominated Commissioner that will not be easily dispelled.

“If anyone in the European project thinks for a minute that they are capable of subverting the years of effort it took us to make the UK the world’s financial centre, they are sadly mistaken. At stake here are at least half a million jobs and the tax revenues which will contribute more than anything else to replenishing the Exchequer after this recession.

“It also needs to be more widely recognised that the City brings benefits to all of the EU, not just the UK. The EU is the centre of much of the world’s commerce, and it is important that it remain so.”

The Evening Standard quoted Nick Anstee, Lord Mayor of London, as saying Sarkozy’s reference to the “free-wheeling Anglo-Saxon” model was aimed at “a disgruntled French electorate”. Mr Anstee said the City should treat the Sarkozy comments as “nationalist rhetoric”.

You may recall, at the G20 summit in London earlier this year, the French president threatened to walk out unless the summit agreed measures to curb the activities of hedge funds.

What is odd, is that very few economists believe hedge funds had anything to do with the causes of the credit crunch.