Fri, 18 June 2021

Newsletter sign-up

Subscribe now
The House Live All
Calls for a gambling advertising ban are not backed up by the evidence Partner content
Glass Half Full or Glass Half Empty? What is the Future for Britain’s Glass and Glazing Industry? Partner content
Press releases

Bank of England braced for ‘disorderly Brexit,’ says Mark Carney

Bank of England braced for ‘disorderly Brexit,’ says Mark Carney

Liz Bates

2 min read

The Bank of England is ready to step in to prevent an economic slump if Britain is plunged into a “disorderly Brexit,” Mark Carney has said.

Speaking at an event yesterday, the bank’s governor said he would be prepared to cut interest rates or halt planned rises in order to offset any negative effects of leaving the EU.

Mr Carney also warned that as Britain adopted new trading arrangements with the bloc, weaker income growth would probably "accompany that adjustment".

The intervention comes after a new report suggested that Theresa May may have to extend the Brexit transition period to establish new customs arrangements.

According to the Exiting the European Union Committee, the UK may be forced to stay in a customs union with the EU beyond 2020 because of the “highly unsatisfactory” lack of progress made on the issue so far.

This follows the Government's admission that EU Withdrawal Bill won’t return to the Commons for at least another fortnight, following a bruising 15 defeats in the Lords.

The Bank of England Governor has previously warned of the negative impact Brexit uncertainty could have on the UK economy.

And in a key speech to the Society of Professional Economists in London he signalled his intention to respond to any negative consequences in “whatever form it takes”.

Mr Carney indicated that this could include lowering interest rates even if that meant the bank deviating from its 2% inflation target.  

He said: “Observers know from our track record that, in exceptional circumstances, we are willing to tolerate some deviation of inflation from target for a limited period of time.”

“We have the tools we need,” he added. “We will be prudent, not passive.

“We will respond to any change in the outlook in these exceptional circumstances to bring inflation sustainably back to target while supporting jobs and activity, consistent with our remit.”

Read the most recent article written by Liz Bates - Jeremy Corbyn admits he would rather see a Brexit deal than a second referendum


Brexit Economy
Engineering a Better World

Can technology deliver a better society? In a new podcast series from the heart of Westminster, The House magazine and the IET discuss with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

New episode - Listen now