Andrew Bailey, the governor of the Bank of England, demanded renewed efforts to recreate trade relationships with the European Union, and warned that the repair of the damage caused by disturbances after the Brexit would be “beneficial”.
His comments come just ten days before a decisive UK-EU summit in London, on which Prime Minister Keir Starrer is supposed to represent a new strategic partnership that aims to resize the relationships after Brexit and revive long-term trading currents.
“A more open economy for trading in the European Union would be an advantage,” said Bailey of the BBC. “In the past few years, the EU has been given a decline in goods trading, and we have to ensure that Brexit will not damage the Great Britain trading position.”
Bailey listened directly to criticize Brexit directly and said that the reversal of some of the negative economic consequences would support growth, especially since Great Britain would like to repeat itself in global trading level.
The renewed focus on EU bonds follows the latest successes on other international trade fronts. At the beginning of this week, Great Britain signed a long-awaited free trade agreement with India, which riger described as a “landmark deal”, which the economy should add to £ 4.8 billion by 2040.
Bailey praised the recent commodity diplomacy of the government and said that the willingness of the United Kingdom to increase deals – including the agreement of the past week with the United States, sends a positive signal about the importance of global trade collaboration.
“Trade agreements can be carried out and the trade is important,” he said. “It is good news in a world in which the effective tariff rate is higher than before all of this.”
While the agreement in Great Britain has a certain relief, including reduced tariffs for British cars and stahlexports.
Bailey spoke at a business conference in Reykjavík, Iceland, and said that the global economy remains volatile and that the central banks have to be “nimble and robust” in view of the continuing uncertainty, especially if the countries are facing rising US tariffs.
The British economy, which has already been weighed up by tax increases and weak consumer expenditure, is further exposed by geopolitical trade disorders. Although the Bank of England reduced interest rates to 4.25% on Thursday, it warned that further cuts would only be carried out if inflation is decreasing to 2%.
Inflation is currently 2.6%, with the bank forecast an increase later this year – a main reason for the careful approach of the monetary policy committee for further interest rate reduction.
The measured attitude of the bank has triggered criticism of corporate groups and unions. The British Chambers of Commerce (BCC) and the Trades Union Congress (TUC) argue that the bank underestimates the severity of the economic downturn, whereby companies and households need direct support.
“Many companies that are desperately after a financial break will find further tariff cuts in the coming months,” said David Bharier, head of research at BCC. “Trust is hit by the twin pressure of the domestic tax increases and the global trade war.”
The TUC reacted these concerns and said that working families also need cheaper loans to cope with the cost of living.
Bailey’s remarks in front of the London summit reflect a growing consensus that Britain has to look at its relationship with the EU – still his largest trading partner – to revive investments, to combat inflation and prepare for the realignment of global trade.
“We must not let political difficulties stand in the way of long -term prosperity,” said Bailey. “This is a moment for pragmatism and reconstruction.”
Bailey’s intervention has the idea of a new UK-EU frame for the British EU framework for trading for a more cooperative trade approach only increased only with new partners, but also with those who are still at home.