BoE governor rejects ‘scaremongering’ claims on doomsday warning

Mark Carney, governor of the Bank of England, defended the central bank’s warnings of a potentially major economic hit from Brexit which angered lawmakers opposed to Prime Minister Theresa May’s plans for leaving the EU.

The BoE said last week that under a worst-case exit from the EU, Britain could suffer greater damage to its economy than during the global financial crisis.

Carney told lawmakers on Tuesday that the scenarios set out by the BoE were based on detailed preparatory work and were not off-the-cuff forecasts.

“There is no exam crisis. We didn’t just stay up all night and write a letter to the Treasury Committee,” Carney said at a committee hearing in parliament.

Less than four months before Brexit, it remains unclear whether Britain will leave the EU with a transition deal to smooth the shock for the economy. May agreed a plan with EU leaders last month, but it faces deep opposition in parliament, including from within May’s own Conservative Party. The plan faces a key vote on Dec. 11.

Pro-Brexit critics of Carney, who have long accused him of political meddling in the debate about Britain’s relationship with the EU, dismissed last week’s BoE report as scaremongering.

Former BoE Governor Mervyn King joined the criticism on Tuesday when he lamented the central bank’s involvement in what he said was an attempt to frighten the country about Brexit.

“It saddens me to see the Bank of England unnecessarily drawn into this project,” King said.

Carney said that the worst-case scenarios were “low-probability events in the context of Brexit,” which the central bank needed to consider to make sure Britain’s banking system could withstand any Brexit shocks.