CARNEY-AGE
Mark Carney reveals he has ordered banks to be ready for a recession if there is a ‘no deal’ Brexit
The Bank of England governor said a failure to reach any agreement would spark a shock to the economy
MARK Carney said yesterday the chances of a no-deal Brexit were “uncomfortably high” as he unveiled emergency preparations.
The Bank of England governor said a failure to reach any agreement in make-or-break negotiations this Autumn would spark a shock to the economy.
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He revealed he has ordered banks to stockpile money for urgent lending under the scenario.
His comments infuriated hardline Tory Brexiteers. Former leader Iain Duncan Smith said: “There is no such thing as a no deal, as the WTO is where the EU and the UK are already and as a rule-based organisation both sides would have to abide by those rules. No deal is the language of project fear.”
Tory Eurosceptics’ leader Jacob Rees-Mogg said Mr Carney had “long been the high priest of project fear”, adding: “His reputation for inaccurate and politically-motivated forecasting has damaged the Bank’s reputation.”
Canadian Mr Carney also said he could immediately cut interest rates to ease the blow, just 24 hours after raising the base rate to 0.75 per cent.
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He added: “A shock could come from a no deal Brexit.”
Branding it “highly undesirable”, he insisted: “Parties should do all things to avoid it.” His blunt remarks sent the Pound tumbling below the important $1.30 mark.
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Mr Carney also equated a no deal Brexit to a recent Bank of England stress test for a big shock to the economy, which included property prices plummeting by a third, interest rates going up to four per cent, unemployment doubling to nine per cent and a full blown recession that would see the economy shrink by four per cent.
Mr Carney — who will leave his role at the Bank of England in June 2019 — made his comments on Radio 4’s Today programme yesterday.
The Sun Says
A NO-DEAL Brexit is “uncomfortably” likely, says Bank boss Mark Carney. Perhaps so.
The crucial thing, given that he says the financial system is ready for it, is to ensure the rest of Britain is too.
If we let the Remoaners’ fear spread we risk agreeing, in panic, a “bad deal” that shackles us to Brussels for ever.
That must not happen.
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