{"id":404484,"date":"2025-09-07T05:33:21","date_gmt":"2025-09-07T05:33:21","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/404484\/"},"modified":"2025-09-07T05:33:21","modified_gmt":"2025-09-07T05:33:21","slug":"no-deal-brexit-to-cost-more-than-covid-bank-of-england-governor-says-brexit","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/404484\/","title":{"rendered":"No-deal Brexit to cost more than Covid, Bank of England governor says | Brexit"},"content":{"rendered":"

The governor of the Bank of England, Andrew Bailey<\/a>, has warned that the economic cost of a no-deal Brexit would be bigger in the long term than the damage caused by Covid-19.<\/p>\n

Bailey said failure to agree to a deal before the Brexit<\/a> transition expires at the end of December would cause disruption to cross-border trade and damage the goodwill between London and Brussels needed to build a future economic partnership.<\/p>\n

Speaking to MPs on the Commons Treasury committee, he said the fallout from the pandemic and the second national lockdown in England was having a much bigger short-term impact on the economy. However, \u201cthe long-term effects, I think, would be larger than the long-term effects of Covid. But \u2026 it would be better to have a trade deal, yes, no question about it.\u201d<\/p>\n

With little more than a month before the transition period ends, a trade deal between London and Brussels is close to being finalised<\/a>, although officials have warned that the risk remains of an accidental no deal if compromises cannot be reached.<\/p>\n

Over the weekend, the chancellor, Rishi Sunak, said that Britain should not accept a deal with the EU at any price<\/a>, insisting that Covid-19 posed a much greater threat to the economy than a no-deal scenario. Sunak said a deal was preferable but that the UK would \u201cprosper in any eventuality\u201d.<\/p>\n

However, Bailey said it was in the \u201cbest interests of both sides, for the UK and the EU, for there to be a trade agreement\u201d.<\/p>\n

It comes after analysis by the London School of Economics and UK in a Changing Europe concluded in September<\/a> that the long-term economic impact of a no-deal Brexit could be two or three times worse than that of the pandemic.<\/p>\n

Asked about the research, Bailey said economic models suggested there would be long-term consequences, as it could take a long time for the UK to adjust to a new trading relationship. \u201cIt takes a much longer period of time for the real side of the economy to adjust to the change in openness and change in the profile of trade,\u201d he said.<\/p>\n

The fallout from Covid-19 and lockdown measures sunk Britain\u2019s economy into the deepest recession on record this spring, with a 20% drop in gross domestic product<\/a> (GDP) in the second quarter.<\/p>\n

With the economy under continued pressure amid the second Covid wave, despite a rapid recovery this summer<\/a>, Threadneedle Street estimates that the pandemic will cause persistent scarring over the long term, with total economic output about 1.75% lower than would otherwise have been the case by the end of 2023.<\/p>\n

No-deal Brexit would not cause as much damage as inflicted by the pandemic earlier this year. However, the LSE modelling<\/a> estimates a reduction in GDP worth 8% over a decade compared with remaining in the EU.<\/p>\n","protected":false},"excerpt":{"rendered":"The governor of the Bank of England, Andrew Bailey, has warned that the economic cost of a no-deal…\n","protected":false},"author":2,"featured_media":404485,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5226],"tags":[802,748,2000,299,5187,1699,4884,16,15],"class_list":{"0":"post-404484","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-brexit","8":"tag-brexit","9":"tag-britain","10":"tag-eu","11":"tag-europe","12":"tag-european","13":"tag-european-union","14":"tag-great-britain","15":"tag-uk","16":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115161386703877196","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/404484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=404484"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/404484\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/404485"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=404484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=404484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=404484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}