Risk of Disorderly Brexit "Alarmingly High", says Mark Carney

While the Bank of England Governor says the City is well prepared for a no-deal Brexit, the risks of that scenario remain high

Alliance News 4 April, 2019 | 9:32AM
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Mark Carney Bank of England Governor

The risk of UK Parliament stumbling into a "disorderly" no-deal Brexit is now "alarmingly high", Bank of England governor Mark Carney has warned.

Carney said that "real progress" had been made in preparing the UK for the prospect of leaving without a deal, which is currently the default option on April 12, but it would still result in "lots of things to worry about".

The Bank's chief also took aim at the "absolute nonsense" suggestions from some Brexiteers that a no-deal departure could be managed using international trade rules to maintain tariff-free commerce.

In an interview with Sky News, he said the risk of a no-deal Brexit "felt uncomfortably high" in August last year and had not got any better.

"Unfortunately I think it proved accurate."

"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 EU 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."

He took aim at the idea promoted by several Brexiteers – and included in the Malthouse Compromise plan – which assumes that Article 24 of the General Agreement on Tariffs and Trade would allow free trade to continue with the EU while negotiations are in progress.

"Forget the fiction, it's absolute nonsense. It needs to be called out," he said.

"I might point out that they want to become better acquainted with the Secretary of State for Trade (Liam Fox) who in Parliament has made the point that it cannot apply unless both parties agree, and unless you're moving towards a – guess what – a customs union."

Carney insisted the City was ready to cope with the impact of a no-deal Brexit.

"There are a lot of things to worry about in the event of a no-deal Brexit, but the financial sector is not one of them," he said.

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