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Thu, 2 April 2020

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Bank of England governor Mark Carney says risk of no-deal Brexit ‘alarmingly high’

Bank of England governor Mark Carney says risk of no-deal Brexit ‘alarmingly high’
2 min read

The chance of Britain crashing out of the European Union is now “alarmingly high”, Mark Carney has said.

The Bank of England governor said that despite “real progress” from businesses, government agencies and the Bank in preparing for the outcome, the institution continued to expect a shock to the economy.

In December, he told MPs that a no-deal Brexit could see average food shopping bills rise by 10%, with the economy shrinking by 8%, house prices crashing 30%, unemployment nearly doubling and inflation spiralling to 6.5%.

On his view from August that Britain faced an “uncomfortably high” chance of leaving without a deal, he told Sky News: “Unfortunately I think it proved accurate”.

The governor continued: “It's alarmingly high now. We're in a situation where the expressed will of parliament is for some form of deal, so to put it in the double negative: parliament is against no deal.

“The government, as expressed by the prime minister, is against no deal, the European Union is against no deal, and yet it is a possibility - it is the default option.

“So no-deal would happen by accident, it would happen suddenly, there would be no transition - it is an accidental disorderly Brexit."

However Mr Carney said while there are “lots of things to worry about” regarding a sudden exit from the bloc, “the financial sector is not one of them”.

He added that businesses still needed a transition period to adjust.

Elsewhere the former Bank of Canada chief blasted claims by hardline Brexiteers that the UK could fall out on WTO terms and maintain zero tariffs as “absolute nonsense”, which he said “needs to be called out”.

Britain is due to leave the EU on 12 April unless it can pass the Government’s withdrawal agreement beforehand, which would in turn push back exit day until 22 May so that legislation can be enforced.

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