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The Bank of England governor said the UK needs to “welcome opportunities to rebuild relations” following , as he backs the Chancellor’s plans to boost business investment and growth.

In his much-anticipated annual Mansion House speech in the City of London, he highlighted the significance of economic growth. He pointed out that since the 2008 financial crisis, the UK has seen weaker productivity growth. "We need to encourage business investment in the UK," Mr Bailey is expected to tell an audience of City bigwigs and Chancellor .

"So, Chancellor, I welcome the plans you have set out in the , and the focus you have placed on public capital investment." Ms Reeves’ autumn Budget statement revealed £40bn in tax hikes aimed at generating funds for schools, the , transport, and housing.

Addressing the effects of foreign trade and investment on productivity, Mr Bailey maintained a neutral stance on Brexit itself, saying: "But I do have to point out the consequences. The changing trading relationship with the EU has weighed on the level of potential supply.

"The impact on trade seems to be more in goods than services, that is not particularly surprising to my mind. But it underlines why we must be alert to and welcome opportunities to rebuild relations while respecting the decision of the British people."

The head of the Bank of England warned about the uncertain economic outlook due to global shocks and the growing divisions in the economy. "The picture is now clouded by the impact of geopolitical shocks and the broader fragmentation of the world economy," he said.

These comments emerge in the wake of Donald Trump's victory in the US presidential race, sparking wide speculation by economists about how his proposed trade policies, like high tariffs on all US imports, might lead to an inflation spike by making UK goods pricier. Additionally, it casts doubt over Britain's trading relationship with the EU.

In another part of his speech, Mr Bailey addressed the deficiencies in the official unemployment numbers because of issues with the Office for National Statistics’ (ONS) job survey response rates. "It is a substantial problem – and not just for monetary policy – when we don’t know how many people are participating in the economy," he will highlight.

Moreover, his frustration with explaining the data inconsistencies to peers is evident: "I do struggle to explain when my fellow governors ask me why the British are particularly bad at this."

He confirmed ongoing discussions with the ONS to foster concerted efforts to address these challenges and heighten the accuracy of UK labour market figures, an initiative also involving other stakeholders like the Treasury.