{"id":91492,"date":"2025-10-19T23:51:13","date_gmt":"2025-10-19T23:51:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/91492\/"},"modified":"2025-10-19T23:51:13","modified_gmt":"2025-10-19T23:51:13","slug":"brexit-impact-on-uk-economy-will-be-negative-for-foreseeable-future-bailey-warns","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/91492\/","title":{"rendered":"Brexit impact on UK economy will be negative for foreseeable future, Bailey warns"},"content":{"rendered":"

Your support helps us to tell the story<\/p>\n

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it’s investigating the financials of Elon Musk’s pro-Trump PAC or producing our latest documentary, ‘The A Word’, which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.<\/p>\n

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.<\/p>\n

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.<\/p>\n

Your support makes all the difference.Read more<\/p>\n

Brexit<\/a> will have a negative impact on the UK\u2019s economic growth \u201cfor the foreseeable future\u201d, Bank of England governor Andrew Bailey<\/a> has warned.<\/p>\n

The economy is, however, likely to adjust and find balance again in the longer term, Mr Bailey, who was speaking at the G30 40th annual International Banking Seminar on Saturday, added.<\/p>\n

The event in Washington, DC saw Mr Bailey highlight a decline in the UK\u2019s potential growth rate from 2.5 per cent to 1.5 per cent over the past 15 years.<\/p>\n

He linked this to lower productivity growth, an ageing population and trade restrictions \u2013 including post-Brexit economic policies.<\/p>\n

\u201cFor nearly a decade, I have been very careful to say that I take no position per se on Brexit, which was a decision by the people of the UK, and it is our job as public officials to implement it,\u201d Mr Bailey said.<\/p>\n

\u201cBut, I quite often get asked a second question: what\u2019s the impact on economic growth?<\/p>\n

\u201cAnd as a public official, I have to answer that question.<\/p>\n

\u201cAnd the answer is that for the foreseeable future it is negative.<\/p>\n

\u201cBut over the longer term, there will be \u2013 because trade adjusts \u2013 some at least partial rebalancing,\u201d Mr Bailey added.<\/p>\n

\"BankBank of England governor Andrew Bailey (PA Wire)<\/p>\n

Referencing the works of 18th-century economist and philosopher Adam Smith<\/a>, he continued: \u201cWhy do I give that answer? Because that\u2019s the Smithian growth model: making an economy less open restricts growth over the long term.<\/p>\n

\u201cLonger term, you will get some adjustment. Trade<\/a> does adjust, it does rebuild.<\/p>\n

\u201cAnd all the evidence we have from the UK is that is exactly what is happening.\u201d<\/p>\n

Investment in innovation and new technologies, including AI, may help address the decline in productivity growth in the long run, Mr Bailey said.<\/p>\n

\u201cIf we take account of the impact of ageing and trade restrictions, we\u2019re really putting our chips on investment,\u201d he said.<\/p>\n

\u201cWe\u2019re putting our chips on general-purpose technology, and AI looks like the next general-purpose technology, so we need to work with it.<\/p>\n

\u201cWe need to ensure that it develops appropriately and well.\u201d<\/p>\n

Mr Bailey warned that, although AI is likely to usher in a breakthrough in productivity long-term, it may \u201cin the current circumstances, be a risk to financial stability through stretched valuations in the markets\u201d.<\/p>\n

\u201cIt doesn\u2019t undermine the fact that AI, in my view, is likely, in addressing this slower growth issue, that we have and the consequences of it \u2013 that it is actually the best hope we have, and we really do need to do all we can to foster it,\u201d he said.<\/p>\n

The Bank of England governor\u2019s prediction comes as Chancellor Rachel Reeves is under pressure ahead of next month\u2019s Budget, with official figures showing muted growth in August following a surprise contraction in July.<\/p>\n

The Office for National Statistics (ONS) said gross domestic product (GDP) rose by 0.1 per cent month-on-month in August and fell by 0.1 per cent in July, in a revision to the previous estimate for no growth.<\/p>\n

In the three months to August, GDP<\/a> grew by 0.3 per cent compared with 0.2 per cent growth in the three months to July, the ONS said.<\/p>\n

The latest figures come after the International Monetary Fund (IMF) earlier this week forecast UK inflation was set to surge to the highest in the G7 in 2025 and 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"Your support helps us to tell the story From reproductive rights to climate change to Big Tech, The…\n","protected":false},"author":2,"featured_media":91493,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-91492","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/91492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=91492"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/91492\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/91493"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=91492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=91492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=91492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}