Bloomberg Talks Bank of England Governor Andrew Bailey Talks Trade, Brexit
May 29, 2025
Andrew Bailey, Governor of the Bank of England, discusses the importance of forging deeper trade ties with the EU to boost the UK economy post-Brexit. He celebrates a recent agreement with Brussels but emphasizes the need for further enhancements. While acknowledging a potential GDP gain of 0.2% from the deal by 2040, he warns it's minimal compared to the estimated 4% economic downturn due to Brexit. The conversation touches on trade complexities, the importance of productivity, and balancing monetary policies amidst current global economic challenges.
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Deepen UK-EU Trade Ties
- Do everything possible to redevelop and deepen the trade relationship between the UK and EU for economic growth.
- Focus especially on financial services where there are many common interests and mutual benefits.
Low UK Growth Post-Crisis
- The UK's potential growth rate has been lower since the financial crisis, mainly due to productivity and investment issues.
- Raising this growth rate is crucial because lower growth makes macroeconomic policy more challenging.
Risks From Trade Fragmentation
- Global economic fragmentation and trade wars risk harming growth through disrupted knowledge transfer and supply chains.
- Rebuilding a robust multilateral trade system including the WTO and IMF is critically important.