Global growth to stabilise at new, slower pace, Carney believes
BANK of England Governor Mark Carney said yesterday that the UK should be under no illusions about the likely shock to its economy if it leaves the European Union without a transition deal.
The UK is set to leave the EU on March 29 without a deal unless Prime Minister Theresa May can convince the bloc to amend the deal she agreed in November and then sell it to sceptical British politicians.
“You have got to recognise this could go quite badly. We are 45 days before the possibility of it,” Mr Carney said, answering audience questions after a speech at a ‘Financial Time’s event.
“We shouldn’t be under any illusions — I’m not going to put a point estimate on it — but a no-deal, no-transition Brexit would be an economic shock for this economy.”
Mr Carney, a Canadian, has previously warned of the risks that Brexit poses to the United Kingdom, the world’s fifth-biggest economy, earning him the ire of some anti-EU politicians.
He said data published on Monday that showed a sharp slowdown in Britain’s economy in late 2018 were consistent with the BoE’s forecasts, and that the figures underscored the need for clarity around Brexit. Most of Mr Carney’s speech focused on the outlook for the global economy.
He said growth was likely to stabilise at a new, slower pace – although China, trade wars and rising protectionism threatened the “delicate equilibrium”.
He said the UK could be seen as a “leading indicator” of a reversal of globalisation.