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Brexit is partly responsible for high inflation in the UK, Rachel Reeves He said while raising the issue of rebuilding relations with the European Union.
chancellor Said that the reasons for rising prices in Britain also included the cost of trade with Brussels.
During his appearance at the Future Investment Initiative summit in Riyadh saudi arabiaMs Reeves attributed the UK’s vote to cut ties with the EU to “a rejection of open borders”.
But he said there was “public support” for the Labor government’s move to reset ties with the bloc, which also included a deal struck earlier this year aimed at reducing red tape for travelers and businesses.
“I think Brexit was a rejection of open borders, but if you look at Britain today, when we made the deal with the EU in May to remove some of those barriers and launch a really ambitious youth mobility scheme, there was public support for that,” Ms Reeves said.
“And really, perhaps, the kind of concern we had GovernmentThat reopening that can of worms of our relationship with the EU could be quite dangerous – in fact, the response has been very good.
“For businesses, particularly small businesses, which have faced increasing red tape since we left the EU, for workers who are now locked out of the jobs market in Europe, there are clearly huge benefits from rebuilding some of those relationships.”
Ms Reeves is preparing to deliver a challenging budget next month, which is widely expected to raise taxes again to plug holes in the public finances.
Economists at the Institute for Fiscal Studies (IFS) have said they will need to raise £22 billion to restore the £10 billion headroom they have against the borrowing rule they set for themselves in March.
Better than expected inflation pressures have eased slightly, with the consumer price index (CPI) rate holding steady at 3.8% last month, but the Chancellor said on Tuesday it was still too high.
“Inflation is very high in countries around the world, including the UK, and one of the reasons is the very high costs associated with trading with our nearest neighbors and trading partners,” he told the audience.
Ms Reeves is leading a UK delegation to Saudi Arabia as the government looks to deepen ties with the region in the quest for economic growth.
On Tuesday, he welcomed a package of two-way trade and investment deals with the country, which the Treasury says is worth £6.4 billion.
The agreements include up to £5 billion of UK export finance for projects in Saudi Arabia, which the government hopes will open up contracts to British suppliers, and a new Barclays headquarters in Riyadh.
Ms Reeves said, “The £6.3 billion package of new trade, procurement and investment commitments unveiled today will boost business opportunities and create thousands of jobs at home – vital ingredients for driving economic growth and building an economy that works for and rewards the people who work.”
Downing Street has defended the visit amid questions about Saudi Arabia’s human rights record, insisting that “economic partnerships can co-exist with frank dialogue on areas of disagreement”.
“The Chancellor will be honest with Gulf counterparts on areas of difference and cultural differences,” the prime minister’s official spokesman said on Monday.