Chancellor Rachel Reeves is pushing for Britain to accelerate closer economic ties with the EU, claiming that trade with the bloc is the “biggest prize” in the global economy and crucial to boosting growth.

After days of political turmoil at Westminster, Reeves and Prime Minister Sir Keir Starmer are set to reassure business — and Labour MPs — that they are ready to make a new push to reintegrate the UK with the European economy.

Speaking on Wednesday at the London School of Economics at an event organised by the Brussels-based Bruegel think-tank, Reeves will say: “There are three big economic blocs: US, China and Europe.

“We will always seek every opportunity to grow our economy and these trading relationships but ultimately only one of these is on our doorstep, and so the biggest prize is closer integration with Europe,” she will say.

Reeves has previously spoken about her willingness to align with EU rules in the hope of removing barriers to trade in established industries such as chemicals.

Although she has yet to say which other areas she would like to see covered by the new approach, Reeves has told colleagues that an EU-UK summit later this year should identify new work streams. 

Starmer is also expected to make a pro-European speech, including covering new European defence co-operation, when he attends the Munich Security Conference this week, according to UK officials.

Starmer has already said he wants Britain to join a second round of an EU defence fund, known as Safe, if the UK can negotiate a satisfactory entry fee. Joining the fund would allow UK defence groups to carry out 50 per cent of work on a collaborative project and lead it.

In her speech Reeves is expected to say that aligning with certain EU rules when it is in Britain’s “national interest” is not a matter of political ideology but a matter of geography and the need to remove Brexit trade barriers.

Reeves is pushing the EU not to penalise British companies with Brussels’ new “made in Europe” project, telling colleagues: “We are Europe too and need to be part of that. The EU doesn’t have the luxury of saying we can exclude countries that share our values.”

Reeves is also pushing in government for what her allies call “an ambitious youth mobility scheme” to allow more young Europeans to work in Britain.

This month Valdis Dombrovskis, EU finance commissioner, said after meeting Reeves that the bloc would have “an open mind” on British proposals to remove post-Brexit trade barriers. Brussels was “open to discuss different areas as regards a single market”, he added.

European diplomats said they had noticed a step change in the UK approach.

One ambassador in London said they had seen “a complete turnaround” and that talks between the UK and the EU were “moving faster” and becoming “more substantial”.