Bank of England’s Carney hits back at critics of Brexit scenarios

Mark Carney

Mark Carney

Shopping bills could surge by up to 10% if the United Kingdom crashed out of the EU, Bank of England boss Mark Carney has warned. "We didn't just stay up all night and write a letter to the Treasury Committee", Mark Carney said at a committee hearing in parliament.

"For individual food products it's going to vary".

In response to Labour MP John Mann, who said his constituents were unlikely to go vegan if the cost of meat went up, Carney replied: "We might buy a little more local lamb as opposed to imported veal".

Former Bank of England Governor Mervyn King joined the criticism today when he lamented the central bank's involvement in what he said was an attempt to frighten the country about Brexit.

Less than half United Kingdom businesses have initiated contingency plans for a no-deal Brexit, says Mark Carney.

Carney's grilling by the cross-party group comes a week after the Bank of England published a stark post-Brexit economic forecast, warning that GDP would fall by as much as 8% in the case of a disorderly no-deal exit from the EU.

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In the most extreme no-deal scenario, he said shopping bills could rise by up to 10%, but even in an orderly no-deal withdrawal, with a transition period, he said grocery prices could rise by 6%. He branded Carney "a second-tier Canadian politician" who had politicised the Bank of England.

Mr Carney told MPs: "The first set of criticisms of our releasing this information is, in our judgment, unfair".

"You asked for something that we had, and we brought it, and we gave it to you". He also dubbed the criticism of the Governor by Brexiteer Jacob Rees-Mogg as being "contemptuous of Parliament".

He said a core team of 20 senior economists worked on it for a couple of years, 150 different professionals across the Bank were also drawn in and then the report was reviewed by both the Monetary Policy Committee and the Bank's Financial Policy Committee. As David Pollard reports, his appearance came just as lawmakers opened five days of debate ahead of a make-or-break vote for May's proposed European Union withdrawal deal.

The stability of the economy could be at risk because Britain would have to implement the EU's rules without a say on their design.

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