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Bank of England chief’s Brexit predictions blamed for fall in pound

Bank of England chief’s Brexit predictions blamed for fall in pound
2 min read

The Governor of the Bank of England has sparked a slump in the pound after revealing his predictions for a 'no deal' Brexit.


Mark Carney claimed that the chances of Britain leaving the European Union next year without a deal were "uncomfortably high" whilst appearing on the BBC’s Today programme.

When asked if a no deal Brexit would be a disaster, Mr Carney told the BBC: "Parties should do all things to avoid it."

He also revealed that the central bank had run stress tests predicting a rise in unemployment and a fall in house prices in the wake of a 'no deal' Brexit.

After he made the comments, sterling lost a cent against the dollar, approaching its weakest level for 11 months. It increased later in the day but remains far weaker than it was a few months ago. The pound also dropped against the euro.

Mr Carney’s comments, which have consequently resulted in an increase in the cost of foreign holidays, have sparked criticism from MPs and economists.

Former Brexit minister David Jones told the Telegraph: “Mark Carney is in a position of considerable influence and authority, and making ill-considered remarks like that does have an impact in the real world.

“It would be really quite helpful if he considered that before he made statements like this.”

Mr Carney was meanwhile branded “the high priest of project fear” by leading Brexiteer MP Jacob Rees-Mogg following the interview.

“His politically-motivated forecasting has damaged the reputation of the Bank of England,” he said.

James Knightley, an economist at ING, meanwhile added: “Mark Carney’s warning isn’t exactly going to help stimulate businesses into action.”

But Labour MP David Lammy - a member of the pro-Remain Best for Britain campaign - urged people to take the Bank chief’s warning seriously.

"The no deal exercise carried out by the Bank of England shows the devastation a nightmare no deal would bring," he said.

"Brexit is not the answer to this country's looming questions. It doesn't help plug the income gap between the rich and the poor, it doesn’t help our economy grow, and it doesn’t help our schools or hospitals, which depend on our EU membership."

 

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