![\"Reeves](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/05\/reeves-and-bank-of-england.jpg\")
<\/p>\nAndrew Bailey has backed Rachel Reeves’s efforts to strengthen relations with the European Union, arguing that Britain \u201cneeds allies\u201d to support economic growth.<\/p>\n
The Bank of England Governor made the remarks during the central bank\u2019s annual Agenda for Research conference on Thursday.<\/p>\n
His remarks follow the Chancellor’s warning that the Iran conflict is driving up prices and strengthening the case for reducing trade barriers with the EU, after she told the National Growth Debate that European nations are \u201cour closest neighbours, our biggest trading partners\u201d.<\/p>\n
She said that \u201cif you load additional costs on exporters and importers, the costs are ultimately going to be borne by the consumer\u201d, arguing that alignment with EU rules in sectors such as chemicals and food standards would help cut prices.<\/p>\n
The Prime Minister is preparing to outline fresh proposals aimed at drawing Britain closer to Brussels, with announcements expected as early as Monday.<\/p>\n
Addressing the event, the Governor described rebuilding trade links with Europe as a \u201csensible thing to do\u201d for the UK economy.<\/p>\n
\u201cWe\u2019re an open economy, we do need allies,\u201d Mr Bailey said. \u201cI think seeking to rebuild trade relations with Europe is a sensible thing to do.\u201d<\/p>\n
He also referenced economist Adam Smith while discussing the relationship between trade and economic growth.<\/p>\n
\u201cI always sort of try to skip around the Brexit debate per se because I\u2019m a public official,\u201d he said, \u201cbut I usually lean on Adam Smith at this point and say: \u2018Look, we learned from Adam Smith the relationship between trade and growth.\u2019\u201d<\/p>\n
The comments amount to a significant endorsement of Sir Keir\u2019s strategy as the Prime Minister seeks to regain momentum following Labour\u2019s poor local election results.<\/p>\n
Andrew Bailey said rebuilding trade relations with Europe would support economic growth<\/p>\n
| <\/p>\n
GETTY<\/p>\n
Those elections marked a difficult setback for the Government and increased pressure on Labour\u2019s leadership.<\/p>\n
Last year, Sir Keir agreed a \u201creset\u201d arrangement with European leaders aimed at improving post\u2011Brexit cooperation.<\/p>\n
Under the agreement, Britain committed to aligning with EU food standards and accepting oversight from the European Court of Justice in certain areas.<\/p>\n
The deal also reduced customs checks on British exports entering the bloc.<\/p>\n
![\"Brexit](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/05\/brexit-opinion-polls-over-the-last-five-years.png\")
However, the arrangement requires the UK to follow regulations it no longer helps shape and involves renewed British financial contributions to EU programmes.<\/p>\n
Given the sensitivity surrounding Brexit\u2011related remarks from senior public officials, Mr Bailey\u2019s comments are likely to attract political attention.<\/p>\n
His predecessor, Mark Carney, repeatedly faced criticism from Leave supporters during the Brexit debate over warnings about the economic consequences of leaving the EU.<\/p>\n
Since becoming Governor, Mr Bailey has consistently argued in favour of closer cooperation with Brussels.<\/p>\n
At the Mansion House dinner in 2024, he urged Chancellor Rachel Reeves to pursue stronger ties with the EU and warned that Brexit carried \u201cconsequences\u201d for economic growth.<\/p>\n
During a speech in Dublin last year, he encouraged ministers to deepen cooperation with Europe to offset what he described as the \u201cnegative effects\u201d on trade.<\/p>\n
While speaking in Washington DC in 2025, he warned that Brexit\u2019s impact on the British economy would remain \u201cnegative\u201d for the \u201cforeseeable future\u201d.<\/p>\n
Beyond Europe, Mr Bailey stressed the importance of maintaining international economic institutions during what he called \u201ca critical time\u201d for global cooperation.<\/p>\n
He highlighted Britain\u2019s upcoming role as chair of the G20, which the UK is set to assume from the United States next year.<\/p>\n
\u201cWe\u2019re going to inherit the chair of it next year from the US,\u201d he said. \u201cWe have to preserve it and seek to rebuild it.\u201d<\/p>\n
International institutions, he warned, remain essential to global economic stability.<\/p>\n
\u201cWithout having that structure, I think we are in a much more dangerous place,\u201d he said.<\/p>\n
The Governor also urged continued British support for organisations including the International Monetary Fund alongside the G20 framework.<\/p>\n","protected":false},"excerpt":{"rendered":"Andrew Bailey has backed Rachel Reeves’s efforts to strengthen relations with the European Union, arguing that Britain \u201cneeds…\n","protected":false},"author":2,"featured_media":947473,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5008],"tags":[936,748,393,4884,1232,285,619,16,3106,15],"class_list":{"0":"post-947472","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-england","8":"tag-bank-of-england","9":"tag-britain","10":"tag-england","11":"tag-great-britain","12":"tag-money","13":"tag-politics","14":"tag-rachel-reeves","15":"tag-uk","16":"tag-uk-politics","17":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/116542542791731600","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/947472","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=947472"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/947472\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/947473"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=947472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=947472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=947472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}