In a speech at London’s Mansion House, Bank of England (BoE) Governor Andrew Bailey reminded financiers and government officials of the importance of free trade amid a global rise in protectionism.
“I will own up to being an old-fashioned free trader at heart,” Bailey said in a speech in an event aimed at London’s finance industry. Chancellor of the Exchequer Rachel Reeves was also in attendance.
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Bailey discussed the effects of the US election outcome and warned that the UK should avoid being reactionary in the case that Trump does apply high import tariffs. The US is a major market for UK exports and if the across-the-board 10-20% import tariffs in the US realize themselves, the UK economy will undoubtedly feel the impact.
“Amid the important need to be alert to threats to economic security, let’s please remember the importance of openness,” Bailey added in clear reference to Trump’s recent win.
“Openness to trade in goods and services affects productivity by facilitating competition, innovation and specialization,” he said.
Bailey also touched on the effects the Brexit has had for the British economy. He clarified that while he takes “no position on Brexit per se,” he does “have to point out consequences.”
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By GlobalDataThe split with the EU has affected the trading of goods more than services which Bailey said “underlines why we must be alert to and welcome opportunities to rebuild relations while respecting the decision of the British people.”
Keir Starmer’s government has clarified that while the UK will not renter the single market, Labour will work towards a closer relationship with the bloc.
Earlier this week when Reeves was asked about the impact of Trump’s tariffs on US trade, she said the government would “continue to make representations for free and open trade.”
The UK’s economic growth in the third quarter came near zero, reaching a measly 0.1% compared to the 0.5% of the previous quarter. Starmer’s government has been on a mission to frame the country as “open for business” to foreign partners.
