The UK should leave the European single market because the EU has been "pretty unsuccessful", a former governor of the Bank of England has said,
Lord King, who led the Bank for 10 years, warned there are "real question marks" over whether it should seek to remain in the customs union, which might constrain its opportunities to forge new trade deals.
The crossbench peer also acknowledged that Brexit will bring "great political difficulties", but said that there would also be "many opportunities" economically for the UK striking out on its own.
His comments came as it was reported that the billionaire businessman chosen by US President-Elect Donald Trump as his new trade chief has said that Brexit represents a "God-given opportunity" for other countries to take business away from the UK.
Wilbur Ross, the US commerce secretary designate, said Britain was facing a "period of confusion" following the vote to leave the EU and that it was "inevitable" there would be "relocations", according to The Times.
Speaking to BBC Radio 4's Today programme, Lord King said it was too early to judge the economic impact of Brexit, despite data since the June 23 referendum being more positive than some economists had predicted.
He said: "I think the challenges we face mean it's not a bed of roses - no-one should pretend that - but equally it is not the end of the world and there are some real opportunities that arise from the fact of Brexit we might take.
"There are many opportunities and I think we should look at it in a much more self-confident way than either side is approaching it at present.
"Being out of what is a pretty unsuccessful European Union - particularly in the economic sense - gives us opportunities as well as obviously great political difficulties."
Lord King said it made no sense for the UK to seek to join Norway as a non-EU member of the single market, which would allow free access for businesses but probably mean accepting freedom of movement of EU citizens.
What experts have said about Brexit
What experts have said about Brexit
1/11 Chancellor of the Exchequer Philip Hammond
The Chancellor claims London can still be a world financial hub despite Brexit “One of Britain’s great strengths is the ability to offer and aggregate all of the services the global financial services industry needs” “This has not changed as a result of the EU referendum and I will do everything I can to ensure the City of London retains its position as the world’s leading international financial centre.”
2/11 Yanis Varoufakis
Greece's former finance minister compared the UK relations with the EU bloc with a well-known song by the Eagles: “You can check out any time you like, as the Hotel California song says, but you can't really leave. The proof is Theresa May has not even dared to trigger Article 50. It's like Harrison Ford going into Indiana Jones' castle and the path behind him fragmenting. You can get in, but getting out is not at all clear”
3/11 Michael O’Leary
Ryanair boss says UK will be ‘screwed’ by EU in Brexit trade deals: “I have no faith in the politicians in London going on about how ‘the world will want to trade with us’. The world will want to screw you – that's what happens in trade talks,” he said. “They have no interest in giving the UK a deal on trade”
4/11 Tim Martin
JD Wetherspoon's chairman has said claims that the UK would see serious economic consequences from a Brexit vote were "lurid" and wrong: “We were told it would be Armageddon from the OECD, from the IMF, David Cameron, the chancellor and President Obama who were predicting locusts in the fields and tidal waves in the North Sea"
5/11 Mark Carney
Governor of Bank of England is 'serene' about Bank of England's Brexit stance: “I am absolutely serene about the … judgments made both by the MPC and the FPC”
6/11 Christine Lagarde
IMF chief urges quick Brexit to reduce economic uncertainty: “We want to see clarity sooner rather than later because we think that a lack of clarity feeds uncertainty, which itself undermines investment appetites and decision making”
7/11 Inga Beale
Lloyd’s chief executive says Brexit is a major issue: "Clearly the UK's referendum on its EU membership is a major issue for us to deal with and we are now focusing our attention on having in place the plans that will ensure Lloyd's continues trading across Europe”
8/11 Colm Kelleher
President of US bank Morgan Stanley says City of London ‘will suffer’ as result of the EU referendum: “I do believe, and I said prior to the referendum, that the City of London will suffer as result of Brexit. The issue is how much”
9/11 Richard Branson
Virgin founder believes we've lost a THIRD of our value because of Brexit and cancelled a deal worth 3,000 jobs: We're not any worse than anybody else, but I suspect we've lost a third of our value which is dreadful for people in the workplace.' He continued: "We were about to do a very big deal, we cancelled that deal, that would have involved 3,000 jobs, and that’s happening all over the country"
10/11 Barack Obama
US President believes Britain was wrong to vote to leave the EU: "It is absolutely true that I believed pre-Brexit vote and continue to believe post-Brexit vote that the world benefited enormously from the United Kingdom's participation in the EU. We are fully supportive of a process that is as little disruptive as possible so that people around the world can continue to benefit from economic growth"
11/11 Kristin Forbes
American economist and an external member of the Monetary Policy Committee of the Bank of England argues that the economy had been “less stormy than many expected” following the shock referendum result: “For now…the economy is experiencing some chop, but no tsunami. The adverse winds could quickly pick up – and merit a stronger policy response. But recently they have shifted to a more favourable direction”
And he raised doubts over the merits of remaining within the customs union, which would allow Britain to trade goods without border tariffs, like Turkey, but restrict its ability to strike its own trade deals.
A Turkey-style arrangement would make it "more difficult to take advantage of those opportunities," said Lord King.
"I don't think it makes sense for us to pretend we should remain in the single market and I think there are real question marks about whether it makes sense to remain in the customs union. Clearly if we do that we cannot make our own trade deals with other countries."
Lord King said the Government should outline its policies on immigration "sooner rather than later", arguing that it would be a "mistake" to make them part of the withdrawal negotiations which will be triggered when Theresa May invokes Article 50 of the EU treaties next year.
Mr Ross will be responsible for negotiating a free trade deal with the UK and his reported comments will raise concerns the incoming US administration will seek to exploit Britain's isolation following Brexit.
His remarks were said to have been made to an audience of Cypriot financiers in the days following last June's referendum vote - before he had been appointed to Mr Trump's cabinet.
"I recommend that Cyprus should adopt and immediately announce even more liberal financial service policies than it already has so that it can try to take advantage of the inevitable relocations that will occur during the period of confusion," he is quoted as saying.
He is said to have added that the UK's withdrawal from the EU was a "God-given opportunity" for financial rivals of the City of London, naming Frankfurt and Dublin in particular.
Labour said his comments, should be a "salutary warning" that other countries were ready to take advantage of the UK's vulnerability post-Brexit.
But a Government spokesman sought to play down the report saying: "We will build a relationship with the new administration based on substance not rumour."
Meanwhile, Lord King defended his Bank of England successor Mark Carney against charges that he has been too "political" in warning about the possible economic consequences of leaving the EU.
Mr Carney had been put in an "almost impossible position" but had remained within the Bank of England's remit to outline the possible path of economic growth in the short term should Britain vote to leave the EU, he said.Reuse content