Carney: Boom in economy is being stifled by Brexit

BRITAIN’S economy would be “booming” if not for Brexit, the governor of the Bank of England has claimed.

Mark Carney said businesses were waiting for the outcome of Theresa May’s negotiations with the EU before making investment decisions, which was slowing down economic growth.

He said the Bank’s predictions for foreign investment in Britain was 20 per cent lower than before the referendum. Speaking on ITV’S Peston on Sunday, he said: “Since the referendum, what we’re seeing is that business investment has picked up, but it hasn’t picked up to any of the extent that one would have expected given how strong the world is, how easy financial conditions are, how high profitability is and how little spare capacity they have.”

Acknowledging the strength of the economy, Mr Carney warned: “It should really be booming, but it’s just growing. I think we know why that’s the case, because they’re waiting to see the nature of the deal with the European Union. It’s the most important investment destination and [businesses] need to know transition and end state. Everybody knows this, the Government knows it and is working on it, UK businesses know it and the Europeans know it.”

Asked if the economy would take a hit if the UK left the EU without a Brexit deal, he said: “In the short term, without question. If we have materially less access [to the EU’S single market] than we have now, this economy is going to need to reorient, and during that period of time it will weigh on growth.”

He added that in the event of a bad Brexit deal, the Bank would not be able to cut future interest rates because of inflationary pressure.

Damien Moore, the Conservative MP, responded: “Carney and others were saying the economy would suffer until the Brexit vote and quite the contrary has happened.”