Brexit has 'weighed' on economy and UK 'must rebuild relations' with EU - Bank of England governor

14 November 2024, 20:35 | Updated: 14 November 2024, 21:44

Brexit has "weighed" on the British economy and relations with the EU must be rebuilt, according to the governor of the Bank of England.

Andrew Bailey's comments come in a speech at the City of London's Mansion House this evening and were widely trailed beforehand.

He said although he takes "no position on Brexit per se... I do have to point out the consequences".

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"The changing trading relationship with the EU has weighed on the level of potential supply," he told investors gathered at the annual event, after Chancellor Rachel Reeves spoke.

She used her first Mansion House address as chancellor to criticise post-financial crash regulation, saying it has "gone too far" - setting a course for cutting red tape.

On Brexit, Mr Bailey said: "The impact on trade seems to be more in goods than services, that is not particularly surprising to my mind.

"But it underlines why we must be alert to and welcome opportunities to rebuild relations while respecting the decision of the British people."

A report earlier this year suggested Brexit has cost the UK economy £140bn so far and could leave us worse off by £311bn by the middle of the next decade.

Sir Keir Starmer has vowed to reset relations with Brussels following a tumultuous period under the Tories, but details of what this could look like are vague.

EU nations are reportedly pushing for a youth mobility scheme - something the prime minister has ruled out.

He has also been adamant there will be no return to the single market, customs union or freedom of movement.

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Mr Bailey's remarks come a week after Donald Trump won the US presidential election, with many economists questioning the potential impact of his proposals to hike tariffs on all US imports.

Such a move could put pressure on UK goods prices, contributing to rising inflation, experts have suggested.

It also raises questions about the UK's current trade ties with the EU.

Mr Bailey also welcomed the chancellor's spending plans set out in her budget last month, which included £40bn worth of tax increases to pour cash into schools, the NHS, transport and housing.

(c) Sky News 2024: Brexit has 'weighed' on economy and UK 'must rebuild relations' with EU - Bank of England governor