A new report has revealed that closer alignment with the European Union (EU) could boost the UK economy by up to 2.2%, potentially steering the country away from recession and putting Labour’s economic growth agenda back on track.
The study, conducted by Frontier Economics and commissioned by Best for Britain, is understood to align with the UK government’s own estimates on the potential gains from the Brexit reset talks, which officially began last week. Cabinet Office Minister Nick Thomas-Symonds, who is leading the negotiations, has expressed hopes of securing a deal within three months.
A Critical Economic Opportunity
With Britain on the brink of recession, the findings could prove pivotal for Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves, who are focused on reviving economic growth. The report indicates that securing deeper alignment with the EU in both goods and services could deliver a substantial uplift to GDP (1.7% to 2.2%), while even partial alignment on goods alone could generate growth between 1% and 1.5%.
David Henig, director of the UK Trade Policy Project, suggested that these projections are realistic but warned that progress hinges on EU goodwill. “I believe results to be roughly the same numbers that the UK government itself has found. But there needs to be a lot of goodwill from the EU, which as yet may not be there,” he told The Independent. “It may be too early for the EU to trust the UK’s intentions, I think. So the [Starmer offering] defence is one of a few confidence-building measures.”
A Strategy of Diplomacy and Trade
Rather than seeking to rejoin the single market or customs union, Starmer’s approach is centred on pragmatic cooperation. He hopes that UK support on defence and security, coupled with high-profile diplomatic engagements—including Downing Street dinners with EU leaders—will foster a more constructive negotiating environment.
Significantly, the report suggests that alignment on goods could disproportionately benefit regions outside London, with the West Midlands, East Midlands, North East, and Yorkshire expected to see the greatest economic gains. It could also offer resilience against potential US trade disruptions, particularly if Donald Trump’s proposed tariffs come into effect, by allowing the EU to offset losses through frictionless trade with the UK.
Business Impact and Public Opinion
The benefits of closer alignment extend beyond GDP growth. Marco Forgione, director general of the Chartered Institute of Export and International Trade, pointed out the practical advantages for businesses. “Alignment can certainly work. But the problem has been the UK exporting into the EU more than the EU exporting into the UK,” he said, citing a case where a British poultry producer lost four lorry-loads of chickens due to a minor documentation error at the border.
A large-scale YouGov poll of nearly 15,000 people, also commissioned by Best for Britain, found strong public backing for closer ties with the EU. In all but two constituencies—Castle Point and Nigel Farage’s Clacton—alignment with EU standards and regulations was the most popular option.
According to the poll, 41% of respondents supported closer alignment, compared to 22% who wanted less alignment and 19% who preferred the status quo. In Clacton, the result was tight, with 42% opposing and 39% supporting greater alignment. Nationally, more voters (44%) said they would be willing to follow all EU rules than those who would not (38%).
A Turning Point for UK-EU Relations?
Best for Britain’s chief executive, Naomi Smith, described deeper regulatory alignment as a transformative economic opportunity. “No other policy proposal or infrastructure investment has the potential to move the economic dial on this scale in this timeframe,” she said. “Voters want it, businesses need it, the time is right for the government to commit to it.”
Andrew Lewin MP, chair of the cross-party UK Trade and Business Commission, echoed this sentiment. “The Labour government is the first in more than a decade with a stated aim of negotiating a stronger and closer trading relationship with our allies in the EU. This timely new report shows the opportunity on offer, with an uplift to our economy worth tens of billions of pounds and benefits flowing to all parts of the country.”
He added: “The Chancellor was right to say that when faced with policy choices about how we grow the economy, the answer can’t always be no. Now is the time to say yes to closer regulatory alignment with the European Union and start to undo the damage done by the failed deal of the last government.”
With the economic case for deeper alignment becoming clearer, the question now is whether the EU is willing to reciprocate. As Starmer prepares for high-stakes diplomacy, the coming months could determine the future direction of UK-EU trade relations—and whether Britain can seize the opportunity for renewed economic growth.
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