By Salma El-Sakka
Bank of England Governor Andrew Bailey said on Friday that closer trading ties with the European Union would benefit the British economy, marking a rare intervention in the Brexit debate.
Bailey links trade openness to growth
Asked whether a closer relationship with the EU could boost growth, Bailey told the BBC that the UK being able to trade more openly with its nearest neighbours would be beneficial for growth. He emphasized that as a public official he does not take a position on Brexit itself, but affirmed the economic benefits of market openness.
Burnham prepares EU reset options
Prime Minister Andy Burnham is set to outline options for a new UK-EU relationship at a summit in Brussels on 20 November, including the possibility of rejoining the bloc. Burnham said new agreements could add billions to the economy and boost GDP by around 0.4 per cent, though that represents only a fraction of the estimated 8 per cent GDP hit from Brexit, according to a study by Stanford professor Nick Bloom.
Details of proposed agreements
The new agreements with Brussels would remove border checks on food and drink and introduce a youth mobility scheme allowing people under 35 to live, work, or study in Europe with fewer restrictions. Burnham has pledged to be bolder than his predecessor Sir Keir Starmer but has so far adhered to Labour's manifesto red lines against free movement, rejoining the EU, customs union, or single market.
Economic cost of Brexit highlighted
Analysis revealed this week that UK businesses have paid £7.7 billion in post-Brexit red tape costs to trade with the EU over four years. Economics professor Jonathan Portes said Bailey's assessment is correct, noting that Brexit has damaged the economy and reversing it partially or wholly would boost growth.
Interest rate outlook and Iran war impact
The Bank raised interest rates for the first time in three years on Thursday to combat rising inflation. Bailey warned further rate hikes could be needed the longer the war in Iran continues, while Chancellor John Healey said the conflict was "reaching deep into the pockets of families."
Campaign for closer EU ties
Pro-EU campaigners welcomed Bailey's comments. Naomi Smith of Best for Britain said GDP could be turbocharged by at least £92 billion if the UK restored EU membership. Joe Meighan of European Movement UK said the governor's recognition should give the government confidence to pursue a closer relationship, removing barriers and improving living standards.
