Bank of England Governor: "Brexit Has Harmed the British Economy"

In a speech at the Mansion House dinner in London on Thursday evening, Andrew Bailey stated that he did not take a “stand alone” position on Brexit, but added, “I must point to the consequences.”

Bailey remarked that Brexit has had a “heavy impact” on the economy, particularly highlighting its effect on the UK’s goods trade. “This underscores why we need to be alert to and welcome opportunities to rebuild relationships while respecting the decision of the British public,” he said.

Central bank governors traditionally refrain from entering contentious political issues; however, Bailey's predecessor, Mark Carney, had warned about the potential economic impacts of Brexit prior to the 2016 referendum.

Since the UK's departure from the EU, service exports have performed strongly, but some goods exporters, particularly small firms, have struggled with “non-tariff barriers” such as customs controls.

While the Keir Starmer government has pledged to deepen cooperation with the EU, Brussels has made it clear that it does not wish to engage in broad negotiations on the Trade and Cooperation Agreement (TCA).

The Labour Party is opposed to rejoining the EU's single market or customs union. Instead, the government hopes to achieve more modest changes, such as mutual recognition of professional qualifications and a veterinary agreement that could alleviate the need for controls in food exports.

The Bank Governor spoke against Donald Trump's threat to impose tariffs on all foreign goods sold in the US. Bailey described himself as “essentially an old-fashioned free trader” and opposed this approach.

“What I mean is this; at a time when the need to be vigilant against threats to economic security is important, let us remember the importance of openness,” he said.

Experts from the National Institute of Economic and Social Research warned that if Trump were to implement his plan for a universal 10% tariff on all imports, it could reduce the UK's growth rate by 0.4% next year.

Chancellor Rachel Reeves, in a speech at the same event, which was the annual gathering of the UK finance sector, praised the City, describing it as the “crown jewel” of the UK economy and stating that post-crash regulations had “gone too far.”