In a speech in Dublin, Bank of England Governor Andrew Bailey emphasized the need for the UK to strengthen trade and financial connections with the EU beyond the current government's recent reset deal. While he acknowledged the merit of this deal, Bailey pointed out that it falls short of addressing long-term economic challenges, highlighting the negative economic consequences of Brexit, particularly non-tariff barriers that affect productivity and growth. He refrained from taking a political stance but insisted on minimizing the adverse effects of such barriers on trade.
"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. But there is more we can do."
"If the level of trade is lowered by some action, it will have an effect to reduce productivity growth and thus overall growth. 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."
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