Bank of England Governor Andrew Bailey has called on Sir Keir Starmer to go beyond the government’s recent EU “reset” deal and forge deeper trade and financial links with Brussels, warning that the economic fallout from Brexit and Donald Trump’s resurgent protectionism pose mounting risks to UK growth.
In a major speech delivered in Dublin, Mr Bailey welcomed the government’s latest agreement with the European Union, which reduces customs checks and aligns UK food standards with the bloc. But he said the deal did not go far enough to address the long-term economic challenges Britain faces.
“Just as the Windsor Agreement on trade involving the UK and Ireland was a welcome step forward, so too are the initiatives of the current UK Government to rebuild trade between the UK and EU,” he said. “But there is more we can do.”
Bailey was careful to avoid weighing in on the politics of Brexit, stating: “I take no position on Brexit per se.” However, he made clear that its economic consequences—particularly in the form of non-tariff barriers—have hurt productivity and overall growth.
“If the level of trade is lowered by some action, it will have an effect to reduce productivity growth and thus overall growth. Just as tariffs, by increasing the cost, can reduce the scale of trade, the same goes for the type of non-tariff barrier that Brexit has created,” he said.
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