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Closer ties with EU would boost UK economic growth, Bank of England governor says
Bank of England governor Andrew Bailey said closer trading ties with the EU would benefit UK economic growth, while stressing that he was not taking a position on Brexit itself. His intervention comes as Andy Burnham prepares to discuss options for a closer relationship with the bloc, and amid concerns about weak growth and rising inflation.
Burnham says planned agreements could add around 0.4 per cent to GDP, compared with an estimated 8 per cent hit from Brexit in one study. The agreements are expected to remove food and drink border checks and introduce a youth mobility scheme for people under 35. Burnham has said he wants to go further than the current approach, but Labour’s manifesto rules out free movement and rejoining the EU, customs union or single market.
In short
- Bailey says closer EU trade could support UK growth.
- Proposed agreements could add around 0.4 per cent to GDP.
- Labour’s current red lines rule out rejoining the EU and free movement.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Closer trading ties could reduce barriers for UK businesses, particularly in food and drink, and make it easier to trade with a major nearby market. If agreements also improve opportunities for younger people to work across borders, they could support skills and economic activity; with growth weak, even a modest boost may be worthwhile.
The case against
The reported growth gains are estimates, and the proposed agreements’ contribution may be modest compared with the wider economic challenges facing the UK. Closer alignment and easier cross-border movement could also bring regulatory or political trade-offs, while the government has ruled out broader arrangements such as free movement, the customs union and the single market.
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