The Governor of the Bank of England has called for the UK to “rebuild” trade relationships with the EU after the new US deal. Andrew Bailey insisted it would be “beneficial” to reverse the post-Brexit reduction in trade between Britain and the bloc.
It comes after a UK-US trade agreement was confirmed by Sir Keir Starmer and Donald Trump yesterday. Mr Bailey told the BBC: “It is important we do everything we can to ensure that whatever decisions are taken on the Brexit front do not damage the long-term trade position. So I hope that we can use this to start to rebuild that relationship.”
The Bank’s chief suggested that the trade agreement between Britain and America could set an example to nations around the world.
As part of the agreement, US import taxes which had threatened to cripple British high-end carmakers were cut from 27.5% to 10%, while the 25% tariff on steel has also been removed entirely.
The pact will also give America’s agricultural industry greater access to British markets.
Mr Bailey said: “It demonstrates that trade deals are important.
“Trade deals can be done, and the trade is important… honestly, it seems an unpromising landscape at times,” he said.
“I hope that we can use these deals to rebuild the world trading system.”
It comes as the Prime Minister is pursuing a Brexit “reset” ahead of a UK-EU summit later this month.
The Bank of England had warned earlier on Thursday that original US tariff plans on the UK would have knocked 0.3 percentage points off UK economic growth over the next three years.
The Bank also warned that the global economy was set to grow at a slower pace than previously expected due to heightened global trade tensions.
Meanwhile, the central bank reduced interest rates to a two-year low of 4.25% in the UK after a recent slowdown in inflation.