No deal could add 10pc to UK’s shopping bills, warns Bank governor
SHOPPING BILLS could surge by up to 10 per cent if the UK crashed out of the EU, Bank of England boss Mark Carney has warned.
Mr Carney told MPs on the Treasury Select Committee that increased tariff prices, import costs and a sharp fall in the value of the pound would send food prices soaring “quite quickly”, while cars would also cost more after Brexit.
In the most extreme no-deal scenario, he said shopping bills could rise by up to 10 per cent, but even in an orderly no-deal withdrawal, with a transition period, he said grocery prices could rise by six per cent.
The warning came as he defended the Bank’s apocalyptic Brexit forecasts last week, saying some of the criticisms were “unfair”. Mr Carney said there was “no exam crisis” with teams of experts at the Bank behind the Brexit impact analysis, which he stressed was only published at the Treasury Select Committee’s request.
Mr Carney’s comments follow the Bank’s stark warning last week on the havoc a no-deal Brexit could wreak, with the worstcase scenario sending Britain into a recession worse than the financial crisis. The Bank’s Brexit report last week said a cliff-edge Brexit could see growth fall by up to eight per cent, the pound crash, inflation soar, interest rates jump, unemployment skyrocket and house prices drop by nearly a third.
But the analysis prompted a vicious backlash, with pro-Brexit Conservative MP Jacob-Rees Mogg describing Mr Carney as a “second-tier Canadian politician”.