Britain must ‘rebuild’ trade with EU to repair economy, Bank of England boss insists

Bank of England governor Andrew Bailey has said the UK must "do everything we can" to "rebuild trade with the EU.

The UK must “do everything we can” to “rebuild” our trading relationship with the EU, the Bank of England governor has insisted.

Top banker Andrew Bailey has told the BBC that closer trading ties with the European Union (EU) would benefit the UK economically.

Asked what impact closer ties would have on economic growth and lowering inflation, Bailey said: “It would be beneficial. Having a more open economy to trade with the EU. 

“Because there has been a fall-off in goods trade with the EU over recent years."

According to independent - non-political - research by the House of Commons, and the Office for National Statistics (ONS), in 2024 the EU received 41% of all UK exports and provided 51% of all imports. UK exports to the EU are down from 47% in 2010 and 2011.

Independent research by Frontier Economics, commissioned by Best for Britain, has also shown that closer regulatory alignment with the EU could deliver up to 1.5% GDP growth, with the biggest gains in the Midlands and the North of England.

The central bank boss said the EU was the UK's largest trading partner and stressed the need to “rebuild that relationship”.

"It is important we do everything we can to ensure that whatever decisions are taken on the Brexit front do not damage the long-term trade position,” Bailey added.

“So I hope that we can use this to start to rebuild that relationship.”

The Bank governor also said that the UK's dealmaking across the world - including the recent India and US deals - was setting an important example to other countries.

He said: “It demonstrates that trade deals are important. Trade deals can be done, and the trade is important… honestly, it seems an unpromising landscape at times. 

“But I hope that we can use these deals to rebuild the world trading system.”

Responding, Tom Brufatto, Executive Director of Policy and Research, at Best for Britain, said: 

“While deals with India and the US will be welcome news for UK industry and workers, the governor is right to highlight the greater importance of trade links with our nearest and largest market, the EU.

“Polling shows that British voters expect trade to be the top priority at the government’s EU reset summit this month, as a common sense deal can help drive the economic growth we need to address the huge external threats we face together.”