It is now almost a decade since the UK voted for Brexit and since the tariffs of US president Donald Trump’s first term increased global trade frictions. Brexit removed the UK from the European single market for goods and services. Now though, the country is proposing a pivot back towards alignment with EU regulations.
What could have not been widely predicted back in 2016 was the COVID pandemic, nor a war on European soil. The UK has been exposed to these shocks without the EU support system. So what may once have been impossible to imagine is now on the cards: adopting EU single market rules under new UK legislation.
In May 2025, the UK and EU reached a new trade agreement, paving the way for both sides to move closer on their economies and business. This was hastened by unpredictable US trade tariffs and a weakening of the US-UK-EU relationship. In addition, it has been estimated in a comprehensive study that Brexit has reduced the size of the UK economy by 6-8%.
Politically, the approach announced by the UK prime minister, Keir Starmer, is a courageous step. UK legislation would allow the country to adopt new EU laws without the need for parliament to vote each time. But any plan is certain to provoke strong opposition from the Conservatives and Reform UK.
However, it is a signal of the seriousness of the UK’s intentions to move closer to the EU by adapting to its regulations and giving up independence from EU law. That is a costly move for the UK in terms of its credibility, but the U-turn should reinforce its commitment to the EU.
But beyond this, there are three clear benefits to the UK.
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The EU is built on rules and regulations that guide the bloc’s labour market, trade and security systems. Alignment would clearly help UK businesses, consumers and individual workers to manoeuvre within these systems.
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By breaking from the single market, the UK chose a costlier approach to trading and investing across the EU border. Aligning regulations would reduce cross-border bureaucracy.
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The EU is looking for new trading partners after supply chain disruptions from COVID and the Ukraine war – not to mention the current impact on oil and gas supplies. The EU does not need to rely on the UK, but a new direction in the relationship could reduce the threat of supply chain disruption in future.
A better deal for consumers?
So what could this mean for UK businesses and consumers? Food producers trading within the UK-EU zone would have a quicker turnaround of their fresh produce. This would reach shop shelves in the UK and EU more quickly, giving shoppers better-quality fresh foods.
Reducing the amount of complex paperwork and export health certificates at borders would allow a free flow of fresh food even between Great Britain and Northern Ireland (which remained part of the single market). This trade has been disrupted since Brexit and affects both trade between food producers due to paperwork and border delays, and food security.
Border checks, paperwork and adapting to legal requirements are expensive and so increase food prices (and with that, inflation). Bringing trade between the EU and the UK closer could reduce these costs, and should also allow producers to benefit more from global value chains.
EPA/Marie Therese Hurson
US tariffs are at their highest levels since the second world war, and the knock-on cost effects of supply chain disruption in the Middle East make a strong case for strengthening ties between neighbours.
Going forward, it will be resilience rather than efficiency in trade that will be important for both businesses and nations. Both will want to be able to reconfigure networks at speed. If inflation rises due to product shortages, governments have limited fiscal space to offer direct support to citizens (which would mean increased levels of spending), or to cut taxes.
Another benefit could come in the form of foreign direct investment into the UK from overseas. In 2025, this began shifting from low-cost developing countries towards capital-intensive and technologically-driven investments in developed countries – and especially in the EU (Germany, Italy and France).
Alignment with EU regulation could give investors more confidence to commit to the UK. Foreign direct investment in renewable energy and AI products, for example, would benefit both the UK’s workers and its consumers.
This is a time of new geopolitical alliances, cooperation and blocs. Trading and investment options could help secure economic, political and societal stability in a volatile world. So far, this is a relatively small step by the UK – but starting to align to EU regulations could ease a complex relationship.

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