Economy

Britain better off in EU, says Bank of England governor

Mark Carney highlights economic benefits of membership while calling for reforms

Bank of England governor Mark Carney speaking in Oxford university. He said “the UK is the leading beneficiary” of the free movement of goods, services, capital and labour enshrined in European treaties. Photograph: Reuters

Thu Oct 22 2015 - 01:00

Bank of England governor Mark Carney strongly supported Britain's EU membership yesterday, highlighting its economic benefits while calling for reforms to ensure the union still works in Britain's interests in the future.

His intervention, made in a lecture at Oxford university, will be welcomed by David Cameron. Particularly pleasing for the British prime minister will be the governor's tone in his speech on Europe, which was identical to that of Mr Cameron in praising the benefits of Britain's membership of a reformed EU.

Mr Cameron is understood to have encouraged Mr Carney to set out the issues for the Bank of England raised by a Brexit, even though the prime minister has yet to officially commit to leading the campaign for Britain to stay in the EU.

Mr Carney hopes his speech and an accompanying BoE report will frame the national debate and that the bank will be seen as an honest broker in the fierce arguments raging over Britain’s referendum. Due to be held by the end of 2017, the vote will decide whether the country remains in the EU or seeks to leave.

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The debate will be watched particularly closely in Ireland, in light of the deep trade links between the two countries.

‘Benefits of openness’

Mr Carney said: “Broadly speaking, the evidence suggests that the UK has successfully harnessed the benefits of openness afforded by its EU membership while avoiding some of the drawbacks of reduced flexibility from which some continental European economies suffer”.

He said Britain’s membership of the EU since 1973 had increased the openness of the economy to trade and in doing so had improved the dynamism of the economy, increasing prosperity of all people in Britain.The governor said “the UK is the leading beneficiary” of the free movement of goods, services, capital and labour enshrined in European treaties.

“Taken together, these measures promote competition and spur innovation which ultimately benefits us all.” – Copyright The Financial Times Limited 2015

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