Friday, 1 July 2022 – 08:04

Carney: There’s “alarmingly high” chance of no-deal Brexit

Britain is heading towards a disorderly no-deal Brexit according to Bank of England chief Mark Carney who warns there are still “lots of things to worry about”.

In an interview with Sky News, he explained Britain’s default option is leaving the EU on April 12 without a deal and said suggestions of a no-deal Brexit being easily managed is “absolute nonsense”.

The BoE boss essentially reinstated what he outlined in August 2018 that there would be several chaotic factors if a no-deal were to shock the nation, including unsatisfactory contingency plans to avoid disorder at the country’s ports and the price of food rising by 10%.

His comments come after 170 Tory MPs jointly signed a letter last weekend telling Theresa May to back a no-deal Brexit amid concerns she would be seeking a much longer extension than May 22.

“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,” he told Sky News.

“No deal would happen by accident, it would happen suddenly, there would be no transition – it is an accidental disorderly Brexit.”

But Carney has been criticised for “exaggerating” the risks of a no-deal Brexit, despite the work and “real progress” by over one hundred staff members and economists of the Bank as well as businesses and the government.   

An open critique of Carney is his predecessor and Brexiteer Mervyn King, who in December likened May’s deal to the appeasement of the Nazis in the 1930s and claimed the political elite were forcing the UK to become a vassal state.

And suggested to Bloomberg that Carney had been proved wrong during uncertain periods, like the prediction of an economic downfall following the 2016 referendum which was “based on flimsy and arbitrary assumptions”.

In response to the criticism, Carney referred to his own efforts: “There are lots of things to worry about in the event of a no-deal Brexit, but the financial sector is not one of them.”

He said that although the bank and financial sector seem strong, it did not mean financial markets would easily take on no-deal without a sufficient transition period needed for businesses to readjust.

And when asked whether the UK could leave on World Trade Organization (WTO) terms and have zero tariffs, he said: “Forget the fiction… [it’s] absolute nonsense. It needs to be called out.”

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