Bank of England chief points out 'consequences' of Brexit in annual speech

The Governor of the Bank of England has said Brexit slowed growth and that Britain should "rebuild relations" with the EU in a Mansion House speech, as ITV News Business and Economics Editor Joel Hills reports

The governor of the Bank of England said he had a duty to "point out the consequences" of Brexit, in is annual Mansion House speech on Thursday night.

While insisting he takes no position on the UK's decision to leave the EU, Mr Bailey said Brexit had slowed growth and had an impact on trade.

The UK must "rebuild relations while respecting the decision of the British people,"Mr Bailey told City bosses and Chancellor Rachel Reeves.

“The changing trading relationship with the EU has weighed on the level of potential supply," he said.

“The impact on trade seems to be more in goods than services, that is not particularly surprising to my mind," he will say.

“But it underlines why we must be alert to and welcome opportunities to rebuild relations while respecting the decision of the British people.

“The picture is now clouded by the impact of geopolitical shocks and the broader fragmentation of the world economy."

The remarks come a week after Donald Trump won the US presidential election, with many economists questioning the potential impact of proposals to hike tariffs on all US imports.

Such a move could put pressure on UK goods prices, contributing to rising inflation, experts have suggested.

It also raises questions about the UK’s current trade ties with the EU.

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Mr Bailey is confirmed that the UK had experienced weaker productivity growth since the 2008 financial crisis.

“We need to encourage business investment in the UK," he said.

“So, Chancellor, I welcome the plans you have set out in the Budget, and the focus you have placed on public capital investment.”

Ms Reeves’ autumn Budget statement set out £40 billion worth of tax increases to raise cash to pour into schools, the NHS, transport and housing.

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