Bank of England governor says Brexit 'weighed' on UK economy

By Aysu Bicer

LONDON (AA) - The Bank of England Governor Andrew Bailey has urged UK ministers to rebuild relations with the EU, warning that Brexit has undermined the country’s economy.

Speaking at the Mansion House dinner in London on Thursday evening, Bailey acknowledged the economic consequences of Brexit, particularly its impact on the trade of goods.

"I do have to point out consequences," said Bailey, emphasizing that Brexit has "weighed" on the UK economy.

While he refrained from taking a position on Brexit "per se," he highlighted the challenges faced by goods exporters, especially smaller businesses, due to non-tariff barriers such as customs checks.

Bailey’s comments come as services exports have remained strong post-Brexit, but goods trade continues to face hurdles.

His remarks underline the importance of exploring opportunities to rebuild relations with the EU, while respecting the outcome of the 2016 referendum.

This echoes a shift in tone within political circles, with Labour leader Keir Starmer’s government pledging to deepen cooperation with the EU.

However, Labour has ruled out re-entering the EU’s single market or customs union, focusing instead on securing modest changes such as mutual recognition of professional qualifications and a veterinary agreement to ease food export checks.

Bailey’s speech also touched on global trade tensions, expressing opposition to protectionist measures like tariffs.

In a veiled reference to US President-elect Donald Trump’s recent threats of import taxes on all foreign goods sold to the US, Bailey declared himself "an old-fashioned free trader at heart."

He emphasized the importance of maintaining economic openness, even amidst heightened concerns over economic security.

The governor’s remarks recall warnings issued by his predecessor, Mark Carney, who cautioned about Brexit’s potential economic impact ahead of the 2016 referendum.