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Chances of no deal ‘high’ says bank chief

PUBLISHED: 11:03 03 August 2018

Bank of England governor Mark Carney has called the chances of a no-deal Brexit 'uncomfortably high'
Photo: PA / Daniel Leal-Olivas

Bank of England governor Mark Carney has called the chances of a no-deal Brexit 'uncomfortably high' Photo: PA / Daniel Leal-Olivas

PA Wire/PA Images

The governor of the Bank of England has warned the chance of a no-deal Brexit is “uncomfortably high”.

Mark Carney also said any potential deadlock that leads to the UK crashing out of the European Union would spark higher prices for consumers.

His stark words came as the prime minister cut short her holiday for talks with French president in a bid to win support for her Chequers deal. Sources said the meeting – at president Emmanuel Macron’s summer retreat, Fort de Bregancon – was requested by Theresa May. French media reported that the meeting highlighted a growing desperation from the UK government.

Carney said both the UK and EU should “do all things to avoid” a no-deal scenario.

He added that the banks have done the “stockpiling” and the country’s financial system is in a position to be able to “withstand a shock” which could result from the UK leaving the EU without an agreement.

Carney, appearing on BBC Radio 4’s Today programme, said: “I think the possibility of a no deal is uncomfortably high at this point.”

Asked if no deal would be a disaster, he added: “It is highly undesirable. Parties should do all things to avoid it.”

Pushed on what no deal would mean for people, Carney said “disruption to trade as we know it” before adding: “As a consequence of that, a disruption to the level of economic activity, higher prices for a period of time.

“Our job at the Bank of England is to make sure those issues don’t happen in the financial system so that people will have things to worry about in a no-deal Brexit, which is still a relatively unlikely possibility but it is a possibility, but what we don’t want to have is people worrying about their money in the bank, whether or not they can get a loan from the bank - whether for a mortgage or for a business idea - and we have put the banks through the wringer well in advance of this to make sure they have the capital.”

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