BOE CHIEF URGES PM TO 'DO EVERYTHING' TO 'REBUILD' TRADE WITH THE EU AFTER SEALING DEAL WITH TRUMP

The Bank of England governor has urged Keir Starmer to 'do everything' to bolster trade with the EU.

Andrew Bailey backed deepening relations as the PM pushes ahead with his Brexit 'reset' - after sealing a damage limitation deal with Donald Trump.

In an interview with the BBC, Mr Bailey stressed that he did not take a position on the UK's decision to leave the bloc.

But he said reversing the reduction in trade would be 'beneficial' as Britain tries to revive the stalling economy.

Threadneedle Street moved to cut interest rates from 4.5 per cent to 4.25 per cent yesterday, with concerns about poor growth outweighing the threat of inflation. 

The PM has been rushing to strike a pact with the US before unveiling new terms with the EU at a summit on May 19.

There were concerns that could have enraged Mr Trump, who has claimed the bloc was created to 'screw' the US.

Rumours have been circling that the Brexit 'reset' package will be highly ambitious.

It could include a youth 'free movement' deal and aligning with Brussels food and veterinary standards to reduce trade friction, as well as a security agreement. The French have been pushing for concessions on fishing waters.

The Tories have warned that Labour must not unwind Brexit or compromise the country's ability to do a deeper deal with the US.  

Asked what effect a closer deal with the EU would have on the economy and inflation, Mr Bailey pointed out the bloc is the UK's biggest trading partner.

'It would be beneficial, having a more open economy to trade with the European Union. Because there has been a fall-off in goods trade with the EU over recent years,' he said.

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

Mr Bailey praised the government's efforts to strike trade agreements with the US and India this week, suggesting that set an 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,' he said.

The Bank said yesterday that the original US tariff plans for the UK would have knocked 0.3 percentage points off UK economic growth over the next three years.

The Monetary Policy Committee also warned that the global economy was set to grow at a slower pace than previously expected due to heightened global trade tensions.

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2025-05-09T08:30:22Z