Carney: Get ready for a Brexit investment boom
BUSINESSES will launch major investment drives after Britain signs its Brexit deal with Brussels, the Bank of England’s Governor predicted yesterday.
Mark Carney said many firms had put off important spending decisions since the referendum, but may turn on the taps when Britain’s future relationship with Brussels becomes clear.
In comments highlighting the importance of striking a deal, he claimed that families were already £900 a year poorer than they would have been if Britain had voted not to leave the EU.
But Mr Carney said there may be a pick-up in economic growth and productivity once Brexit is settled.
Appearing before MPs on the Treasury select committee, he said: ‘It’s understandable businesses are holding back – there are some big, big decisions that are about to be made.
‘I could build a case to say that actually business will use those clean balance sheets, access finance and start to put capital to work, and we would see a sharp pick-up in business investment.’
Mr Carney – who warned before the 2016 referendum that Brexit could be an economic disaster – added that the economy was as much as 2 per cent smaller than it would have been if Britain had chosen to remain.
Mr Carney said: ‘Real household incomes are about £900 per household lower than we forecast in mid-2016, which is a lot of money.’ The comments drew an immediate riposte from Foreign Secretary Boris Johnson, a leading Brexiteer.
On a visit to Buenos Aires, he rejected Mr Carney’s view and argued that Britain will prosper outside the EU thanks to new trading opportunities with countries such as Argentina.
Pro-Brexit MP John Redwood dismissed the claims that families are £900 worse off, saying: ‘I see no evidence.’
John Longworth, former director general of the British Chambers of Commerce, said: ‘He’s basing that number on forecasts which were flawed. There are lots of factors influencing that number.’