Almost a decade after Britain voted to leave the European Union, Chancellor Rachel Reeves has broken with her party’s careful silence on Brexit by calling deeper ties with the EU “the biggest prize” for UK economic growth.
Chancellor Rachel Reeves declares deeper EU ties the biggest prize for UK growth, breaking Labour’s long silence on Brexit.
Her bold statement comes at a tricky time. Prime Minister Starmer faces internal power struggles linked to an Epstein scandal, making Reeves’s willingness to tackle Brexit particularly striking. She argues that nearly half of Britain’s trade happens with European neighbors, and economic gravity naturally pulls the UK toward its closest trading partners.
The numbers tell a compelling story. Brexit erected barriers that reduced openness and hurt growth. Britain’s goods trade deficit hit record highs, though services exports reached a healthy £191.8 billion surplus in 2025. Reeves believes aligning with EU rules and standards could reverse some damage caused by leaving the customs union and single market.
Public opinion has shifted noticeably since the 2016 referendum. Recent polls show 56 percent of Britons now think Brexit was wrong. A surge in Reform Party support has forced politicians to finally confront the economic consequences they previously avoided discussing.
Conservative shadow chancellor Mel Stride quickly accused Labour of abandoning Brexit, but Reeves’s frankness reflects growing public skepticism about the divorce benefits. The previous government touted independent trade deals as major wins, yet those agreements haven’t offset the economic costs of reduced European market access. Extended trading hours also give some investors more time to react to such political developments in markets after-hours.
The Labour government has pursued modest improvements since taking power in 2024. They’re negotiating agricultural export deals, energy market cooperation, and youth mobility programs allowing EU citizens under thirty to work and study in Britain. They even considered joining an EU defense fund, though that plan collapsed over financial contributions. Reeves emphasized potential trade growth with Europe exceeding deals with India, the U.S., and Korea.
These efforts remain small compared to the barriers Brexit created. Non-tariff obstacles continue disrupting supply chains and discouraging investment. The so-called reset has delivered more benefits to EU fishermen than British businesses.
With Britain’s economy stagnant and Reeves implementing £41.5 billion in tax increases during her first budget alone, the Brexit wars are returning in 2026. The Chancellor has overseen six interest rate cuts since the election, yet GDP growth slowed to just 0.1% in the final quarter of 2025. Leadership contenders may soon champion closer European ties as the status quo becomes harder to defend.
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