Andrew Bailey said it took time for "the real side of the economy to adjust to the changing profile of trade

A Brexit without an agreement would cause more long-term damage to the economy than the coronavirus pandemic, warned the Governor of the Bank of England

Andrew Bailey said he was relatively optimistic about the economy's ability to recover from the Covid-19 outbreak, but added that it would be more difficult to adjust if the country were to resume negotiations with the European Union under the World Trade Organisation.

"I think the long-term effects would be greater than the long-term effects of Covid," Bailey told the select Treasury committee. "It takes much longer for what I call the real side of the economy to adjust to the change in openness and the change in the profile of trade.

The talks were interrupted this week after a member of Michel Barnier's team contracted coronavirus

Where is the agreement?

Civil servants have begun to draft legislation for a Brexit agreement that will need to pass through the Commons and Lords at a "crazy pace" 

The Government Office has a team of officials working on the future relationship bill, which will enshrine any Brexit agreement in national legislation.

"There is a growing expectation for an agreement," said a Whitehall source. "We need to be ready to pass it in parliament.

Ministers discussed holding weekend sessions in the House of Lords to help approve the agreement by the end of the month. The talks were temporarily halted this week after a member of Michel Barnier's team of coronavirus contractors .

The negotiations are now at the most difficult stage

BREXIT UPDATE

Ireland's Foreign Minister Simon Coveney said a trade deal with Brexit was likely in the next two weeks, but warned that "it will not be easy". He also warned that the biggest trade disruption would be the "new reality" from 1 January, even if a deal between the UK and the EU was closed.