Bank of England chief welcomes Labour efforts to minimise Brexit's 'negative effects'

The Governor of the Bank of England, Andrew Bailey, has called Labour's negotiated deal with the EU a "welcome step forward" in lessening Brexit's negative effects on trade, in a major speech to Irish investors in Dublin. This agreement drew harsh criticism from Conservatives, with leader Kemi Badenoch branding it a "surrender deal."

Under the post-Brexit compromise, British citizens will gain access to shorter queues at airports using passport e-gates and food products will face fewer cross-border checks, in return for ceding current fishing quotas to the bloc until 2038 and payments that could run into the hundreds of millions.

In a wide-ranging speech exhorting the benefits of free trade and warning against a breakdown in the "rules-based world trade system" exemplified by US President Trump's tariff war with competing global economies, Governor Bailey called for more work to lower barriers to international trade.

Before praising the renegotiation of the Windsor Framework deal signed by the Conservatives in 2023, which governs the UK's post-Brexit trade with the EU, Bailey cautioned: "As a public servant, I take no position on Brexit per se – it was a decision of the British people, and has been put into effect."

Explaining his thinking, the Bank of England chief said: "Just as tariffs, by increasing the cost, can reduce the scale of trade, the same goes for the type of non-tariff barrier that Brexit has created.

"Now to reiterate, this does not mean that Brexit is wrong, because there can be other reasons for it, but it does suggest, I think powerfully, that we should do all we can to minimise negative effects on trade."

As well as normalising food and veterinary standards between the UK and the EU, Prime Minister Sir Keir Starmer's deal also saw young Brits offered a new opportunity to live and work in Europe under the “youth experience scheme”. The Labour leader said it was “time to look forward, to move on from the stale old debates and political fights”.

Taking a diplomatic approach to the thorny Brexit issue, Governor Bailey ended by saying: "I conclude from this that, just as the Windsor Agreement on trade involving the UK and Ireland was a welcome step forward, so too are the initiatives of the current UK Government to rebuild trade between the UK and EU"