Starmer says Brexit has 'significantly hurt' UK economy, calls for closer EU ties

Britain must confront the economic damage caused by Brexit and accept the trade-offs required for a closer relationship with the European Union, Prime Minister Keir Starmer said on Monday, arguing that reduced “frictions” with the bloc are essential for the country’s “economic renewal.”

According to a Politico report, in a speech in central London, Starmer said Brexit had “significantly hurt our economy” and warned that the UK could not afford to ignore the consequences of weakened ties with its largest trading partner.

Starmer’s comments came days after talks between London and Brussels collapsed over British participation in the EU’s €150 billion Security Action for Europe loans-for-weapons programme, with negotiations breaking down over the size of the UK’s financial contribution.

Starmer highlighted a proposed SPS deal, aimed at eliminating border checks on plant and animal products, and ongoing negotiations on an emissions trading scheme as examples of areas where the U.K. is making progress with the EU.

“The most important things we can do for growth and business is, first, drive inflation down and second, retain market confidence that allows for economic stability,” Starmer said, according to Politico.

“For economic renewal, we have to keep reducing frictions. We have to move towards a closer relationship with the EU, and accept that this will require trade-offs.”

Starmer defends last week’s tax-hiking budget

Starmer also used the speech to defend last week’s tax-hiking budget, insisting his government has a credible long-term plan to revive the economy.

He described the measures as “fair, necessary and fundamentally good for growth,” while for the first time publicly acknowledging that ministers had considered — but ultimately rejected — a manifesto-breaking increase in the top rate of income tax.

The Prime Minister defended Chancellor Rachel Reeves against accusations of misleading the public over the nation’s finances.

Critics had claimed there was no so-called “black hole” in the accounts, despite repeated warnings before the Budget. Starmer said Reeves had provided stability and raised billions of pounds to create more “headroom” in the economy.

He added that the Budget was a “moment of personal pride” and insisted he would defend it “any day of the week.”

It emerged that prior to the Budget speech, the Office for Budget Responsibility (OBR) informed Reeves that the public finances had improved, showing a surplus of £4.2 billion rather than a deficit.

Reeves has denied misleading the public or the markets.

With inputs from agencies