LONDON — Britons must accept the trade-offs of a closer relationship with the European Union, the U.K. prime minister said Monday.

At a speech in central London, Keir Starmer said Brexit had “significantly hurt our economy,” warning “frictions” with the bloc must be reduced to enable “economic renewal” in the U.K.

It comes days after talks between London and Brussels to allow Britain to participate in the EU’s €150 billion Security Action for Europe loans-for-weapons program broke down, amid a disagreement over how much the U.K. would have to pay to participate.

In his Monday morning speech, Starmer gave a staunch defense of last week’s budget, insisting he does have a long-term economic plan for the U.K.

“The most important things that we can do for growth and business is first, drive inflation down and second, to retain market confidence that allows for recall economic stability,” he said.

But the U.K. must “confront the reality” that the deal struck with Brussels post-Brexit “significantly hurt our economy, he said.

“For economic renewal we have to keep reducing frictions. We have to keep moving towards a closer relationship with the EU, and we have to be grown-up about that, to accept that that will require trade-offs.”

He later cited a proposed SPS deal, which aims to remove the need for border checks on plant and animal products, and talks on an emission trading scheme as examples of where the U.K. is making progress.