Carney Has Last Chance to Send No-Deal Brexit Message to Public
Carney Has Last Chance to Send No-Deal Brexit Message to Public
(Bloomberg) --
Bank of England Governor Mark Carney is running out of opportunities to warn lawmakers just how much a no-deal Brexit will harm the economy.
With Parliament set to be suspended next week, Carney’s appearance before the Treasury Committee Wednesday could be one of his last chances to publicly address MPs before the U.K. leaves the European Union on Oct. 31. The session may also give the BOE the opportunity to fulfill the Committee’s request for updated Brexit assumptions, which were first released last year.
The stakes have been raised by Prime Minister Boris Johnson’s new government, which has stepped up planning for no deal and moved against rebel lawmakers planning to prevent the U.K. leaving the EU without a transition period. Johnson went even further yesterday, signaling he will try to trigger a snap election on Oct. 14 if he loses a crunch vote in Parliament on Tuesday evening.
While the BOE has published its views on worst-case scenarios, it doesn’t include the possibility of a no-deal in its official forecasts until that becomes the government’s stated policy. That means any projections this week would be the closest officials have come to detailing the specific shock of leaving without new trade arrangements in place.
In the most extreme no-deal scenario, which officials stressed wasn’t an outright projection, the BOE saw the economy shrinking by 8% within a year and property prices plunging almost a third.
Following the BOE’s August Inflation Report, Carney said the interest-rate setting panel would update lawmakers when Parliament reconvenes in September. The Treasury Committee itself is also in a period of flux, after previous chair Nicky Morgan took up a cabinet role. In the absence of an elected replacement, members of the Treasury Committee have chosen John Mann as interim chair, they said Tuesday.
On Wednesday, Carney will testify first alongside his colleagues Andy Haldane, Jonathan Haskel and Gertjan Vlieghe, on the bank’s August Inflation Report. He’ll then appear alone to discuss the U.K.’s economic relationship with the European Union.
The session will come the same day that U.K. Chancellor of the Exchequer Sajid Javid is due to announce a one-year spending review, in which he’s expected to allocate extra money for policing, health and education.
--With assistance from Lucy Meakin.
To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Fergal O'Brien
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