UK (Commonwealth) _ The governor of the Bank of England has stated that the United Kingdom must “rebuild relations” with the European Union while honoring the 2016 Brexit vote of the British people.
In his speech to investors at Mansion House, Andrew Bailey made some of his most forceful remarks on Brexit to date, stating that one of its effects has been a decline in commerce. Due to the Bank’s impartiality towards Westminster politics, he has previously refrained from making any comments on the subject.
According to Mr. Bailey, the economy has been “weighed” by the altered relationship with the EU. “I don’t have a stance on Brexit in general as a public official,” he stated. However, I must draw attention to the repercussions.
He continued by saying that it appears that goods are having a greater influence on commerce than services. However, it underscores the importance of recognizing and valuing opportunities for reconciliation, all while respecting the significant vote cast by the British people.
Although Chancellor Rachel Reeves stated in her speech at Mansion House that a deeper partnership would be possible, the government is still against rejoining the EU. “The European Union is our largest trading partner. We will not be going back to the single market or customs union, nor will we be reversing Brexit. But we need to start over,” she remarked.
Mr. Bailey cautioned about geopolitical shocks and the wider disintegration of the global economy, saying the UK shouldn’t only concentrate on the consequences of Brexit. When questioned about US President-elect Donald Trump and his pledge to impose import taxes of up to 20% last week, he said something similar.
According to Vicky Pryce, the chief economic consultant at the Centre for Economics and Business Research, it is highly unlikely that the UK could establish a unique relationship with the US, considering its significant trade with Europe.
“A better deal”
Given the numerous economic shocks in recent years, evaluating the effects of the UK’s vote to exit the EU on the economy has proven challenging. According to independent specialists like the Office for Budget Responsibility, the economy will suffer a 4% decline over the next 15 years.
New trade obstacles have had a particularly negative impact on the goods trade, particularly in food and farm exports. However, trade in services such as banking has performed better than expected. According to some lawmakers, the UK and the EU could have a better relationship.
As the annual event took place, businesses were criticizing the government for stifling growth through tax increases, which Reeves has stated are necessary to “properly fund” public services.
“Crown jewel”
Reeves claimed in her address that rules implemented in the wake of the global financial crisis in 2008 “resulted in a system that sought to eliminate risk-taking” and that these rules have since “gone too far.”
“We cannot take the UK’s status as a global financial center for granted,” she said, adding that financial services in the UK were “the crown jewel in our economy.”
In order to “lay the foundations for more private investment,” the government will release a financial services plan in the spring that will concentrate on fintech, sustainable finance, asset management, insurance, and capital markets, according to Reeves.
What pension fund strategy does Rachel Reeves have in mind? Economists worry that the impact of the Brexit deal in the UK is getting worse. In his speech, Mr. Bailey continued by discussing the UK economy as a whole and its lack of expansion.
He claimed that productivity has declined and has not increased since the 2008 financial crisis. He stated that the US has “a better story to tell” but added that the UK is not the only country dealing with this issue, which he claimed also affects other regions of Europe.
