In a significant development at the annual Mansion House dinner, Chancellor Rachel Reeves and Bank of England Governor Andrew Bailey have jointly emphasised the urgent need to rebuild Britain’s economic ties with the European Union. Their coordinated message comes amid growing concerns about potential trade disruptions, particularly with Donald Trump’s proposed tariff policies looming on the horizon.
Reeves addressed City of London dignitaries with candour, acknowledging the structural challenges stemming from Brexit whilst maintaining a pragmatic stance. “We will not be reversing Brexit or re-entering the single market or customs union, but we must reset our relationship,” she stated, setting a clear direction for future policy.
The Bank of England’s governor highlighted Brexit’s detrimental impact on British trade, particularly in the goods sector. Bailey’s assessment pointed to the necessity of rebuilding relations while respecting the referendum outcome, carefully noting the complications arising from geopolitical tensions and global economic fragmentation.
The timing of this joint intervention aligns with Prime Minister Sir Keir Starmer’s preparations for negotiations with the EU next year. These talks aim to secure improved trade terms, including a veterinary agreement to enhance food trade flows and mutual recognition of professional qualifications.
In a bold move, Reeves called for financial regulators to embrace greater risk-taking, suggesting that post-2008 banking crisis regulations had become excessively restrictive. She announced plans to modernise the financial services sector, including the introduction of digital gilts and a new framework for captive insurance companies.
The chancellor’s vision extends to a comprehensive financial services growth strategy, focusing on five key areas: fintech, sustainable finance, asset management, insurance and reinsurance, and capital markets. This strategic approach aims to position the UK as a leading financial centre while navigating the complexities of post-Brexit international relations.
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