Risk of no-deal Brexit ‘uncomfortably high’: BoE governor

05 August, 2018, 00:29 | Author: Mary Valdez
  • Reserve Bank of India also raised the average inflation projection for the second half of the year to 4.8% from 4.7% in June

The Bank of England governor says he has drawn up emergency preparations as he warned the chances of exiting the European Union without a deal are "uncomfortably high". Officials say there is a growing chance no deal will be struck before the United Kingdom leaves in March.

In a sign of the pressure on May, she cut short a holiday to meet with French President Emmanuel Macron on Friday.

"The possibility of a no-deal is uncomfortably high at this point", Carney told BBC radio.

Carney said Britain's financial system would in any case be able to "withstand the shock" as banks have increased capital and liquidity and contingency plans have already been put in place.

"The possibility of a no deal at the moment is uncomfortably high".

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

Mr Carney added: "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".

During the interview, Carney also cited the scenario from the Bank of England's last stress test - the annual test to make sure Britain's banks could handle a financial crisis and economic downturn - which suggested that in a no deal scenario, the United Kingdom could fall into a recession and see unemployment more than double to 9%.

Pushed on what no deal would mean for people, Mr Carney said "disruption to trade as we know it".

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