The Central Bank of England, calls for rapprochement with the European Union

2024-11-16 09:00:00, Kosova & Bota CNA

Britain must support free trade and rebuild ties with the European Union as the global economy is fragmenting, Bank of England Governor Andrew Bailey said in a speech on Thursday.

Mr Bailey said a commitment to open trade was vital to boost weak investment in Britain and revive manufacturing growth, coupled with unlocking capital from businesses and pension funds, which is planned by Finance Minister Rachel Reeves. .

Brexit, Britain's departure from the European Union in 2020 after approval in a 2016 referendum, contributed to weakening UK trade and damaged the productive capacity of the country's economy, Mr Bailey said.

"As a public official, I take no position on Brexit per se. This is important. But I have to stress the consequences," Mr Bailey said in his annual address at London's Mansion House to senior financial services officials.

"This highlights why we need to be vigilant and open to opportunities to rebuild the relationship while respecting the decision of the British people."

While the new Labor government has ruled out rejoining the EU's single market or customs union, Prime Minister Keir Starmer has said he wants to improve trade links and diplomatic relations with the bloc.

Speaking at the London meeting, Finance Minister Rachel Reeves said Britain needed to "reset" its relationship with the EU and that she also looked forward to working closely with Mr Trump to strengthen trade ties.

Governor Bailey said Britain should focus on the bigger picture for economic growth and not just the impact of leaving the European bloc.

While Mr. Bailey did not directly mention the US election during his speech, policymakers around the world are scrutinizing what Mr. Trump's victory means for high tariffs on exports to the United States. The head of the Bank of England said the tariffs could have far-reaching effects on global trade and inflation.

"The forecast is now clouded by the impact of geopolitical changes and the wider fragmentation of the world economy," Mr Bailey said.

"Amidst the important need to be vigilant about threats to economic security, let's remember the importance of openness... We must do what we can to maintain an open economy," Mr Bailey said. He said he supports the government's plans to increase public investments./ Voa