Mark Carney’s financial wizard admits ‘we may have been too gloomy on Brexit’ vote

THE Bank of England’s financial wizards may have miscalculated the risks to the economy from a vote for Brexit, one of its rate setters admitted yesterday.

Kristin Forbes, one of the experts who helps governor Mark Carney assess the state of the economy each month, said the Bank may need to revise its outlook.

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Ms Forbes’ admission is a massive backtrack for the Bank, which argued during the referendum campaign that there were huge risks for house prices, jobs and businesses and Britain might tip into recession if people voted to leave the EU.

The US-born economist, above, also said the economy probably would not need a further cut in interest rates to help bump-start it.

 The Bank unleashed a three-pronged stimulus programme in August and cut rates to a historic low of 0.25 per cent. A further cut is expected.

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Ms Forbes said yesterday: “The initial effect on the UK economy of the referendum has been less stormy than many expected.”

Even before she spoke, the Bank fired off a new warning over the risks of Brexit, saying that there were still “challenging” times ahead.

The Financial Policy Committee appeared to pour cold water on better-than-expected news on the economy. The Office for National Statistics said this week it had not “fallen at the first fence” on data seen so far and the  Organisation for Economic Co-operation and Development upgraded its growth forecast for the rest of this year.

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MP Jacob Rees-Mogg, a member of the Treasury Select Committee and a Leave backer, who criticised Mr Carney during the referendum campaign, said he should consider his position.

He said: “To stick stubbornly to previous forecasts when everyone else is moving away from them is not helping the Bank restore its reputation. He should ask himself if his continuing there is enhancing the reputation of the Bank of England.”