BoE boss backs stronger EU ties to 'minimise Brexit's impact on trade'

Andrew Bailey yesterday urged the government to deepen ties with the EU, as he said a breakdown in global trade would make the Bank of England's job harder to control inflation.

- Richard Partington Phillip Inman

In a speech in Dublin, the Bank's governor said that a stronger relationship between London and Brussels could "minimise negative effects" of Brexit on trade.

Calling for closer cooperation on financial services as a priority, Bailey said the Labour government's efforts to reset relations with the EU were a "welcome step forward" after the UK's formal departure from the 27-nation bloc in 2020.

Bailey said that as a civil servant he took no position on Brexit, and he understood there could be other reasons why voters had backed leaving the EU.

However, he added that the evidence showed the changing trade relationship had "weighed" on Britain's economy.

"This does not mean that Brexit is wrong because there can be other reasons for it, but it does suggest, I think powerfully, that we should do all we can to minimise negative effects on trade," he said.

The Bank's governor had previously called for the UK to strike deeper ties with Brussels to strengthen the economy before a deal agreed between Keir Starmer and the European Commission president, Ursula von der Leyen, in London this month.