Closer ties with EU would boost UK economic growth, Bank of England governor says

Closer ties with EU would boost UK economic growth, Bank of England governor says In a rare intervention and his first since Andy Burnham reignited the Brexit debate, Andrew Bailey said being able to trade more easily with Britain’s nearest neighbours would help the economy - Bookmark - CommentsGo to comments Become an Independent member to bookmark this article Already a member? Log in Britain’s economy would benefit from closer ties with the European Union, the governor of the Bank of England has said in a rare intervention on the Brexit debate. Andrew Bailey said such a move would boost growth, as Andy Burnham prepares to set out options for a new relationship with the EU, including going “all the way” and rejoining the bloc. His comments come after the bank raised interest rates for the first time in three years on Thursday, in a bid to slow rising inflation. Mr Bailey also warned there could be further rate hikes the longer the war in Iran continues, while the chancellor John Healey said the conflict was "reaching deep into the pockets of families". Asked if the prime minister’s idea of a different, closer relationship with the EU could boost UK growth, Mr Bailey told the BBC: “For over a decade now. I've been very clear that, as a public official, I do not take a position on Brexit per se. “Having said that, the broader question that underpins that, which you rightly ask, is: Would the UK being able to trade more openly with its nearest neighbours, to have that trade, to have that market openness, be beneficial for growth in the UK? My view is yes, it would.” Earlier this week, Mr Burnham said new agreements with the EU, expected to be agreed at a UK-EU summit later this month, would add billions of pounds to the UK economy, boosting GDP by around 0.4 per cent. But that is only a tiny proportion of the estimated 8 per cent hit to GDP as a result of Brexit, according to a study by Nick Bloom, a professor at Stanford University. The Independent revealed earlier this week that UK businesses have had to pay a “staggering” £7.7bn to cover the cost of post-Brexit red tape alone to trade with the EU in just four years, according to new analysis. Jonathan Portes, economics professor at King’s College London and the former chief economist at the Cabinet Office, told The Independent Mr Bailey’s assessment was correct. He said: “The governor is simply stating the obvious: Brexit has damaged the UK economy and reversing it partially or wholly would boost growth. “The real question, however, which the governor unsurprisingly dodges, is whether there is any politically feasible half-way house, or whether the real choice is between some version of the status quo and Rejoin." Mr Burnham has already been warned that his ‘reset’ later this month must be a “launch pad” for reversing Brexit. The new agreements with Brussels will see border checks on food and drink stripped away and a new youth mobility scheme, allowing people under 35 the right to live, work or study in Europe with fewer restrictions. Mr Burnham has said he wants to be “bolder” than his predecessor, Sir Keir Starmer, but has so far stuck to Labour’s manifesto red lines, which prevent agreements on free movement, or rejoining the EU, customs union or single market. However, he plans to use the summit in Brussels on 20 November to launch a new discussion on the options for the UK beyond the next election, with rejoining the bloc on the cards as a manifesto pledge. He has also pledged the UK public will be the “boss” of what any future relationship looks like. As prime minister Andy Burnham looks at the way ahead for Britain's relationship with Europe, The Independent has been leading the charge, campaigning to secure the absolute best deal for Britain. Become an Independent member for just £1 for six months and join a like-minded community of thousands signed up to our Europe: The Way Back campaign. Benefits - Free weekly newsletter: Every Wednesday, political editor David Maddox and political correspondent Millie Cooke will be in your inbox with exclusive reporting, analysis and insight on the biggest developments shaping relations between Britain and Europe. Each week, they will explain what’s happened, what it means, and what the key political figures, experts and decision-makers are saying about it. - Essential continental updates: Stay informed with regular briefings on the biggest developments in European politics and the specific policies that could pave the way for closer EU relations. - Exclusive content: Get the highest quality analysis, opinion and debate from political experts across the UK and Europe. - Inform the debate: Join our thriving commenting community and receive exclusive invitations to future live events, webinars, expert Q&As and podcast recordings. Join our commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies Comments [Image text:] Sonk sfEnglend gland Bank efEngland dned