The Star Early Edition

Bri­tish econ­omy with­out Brexit deal ‘heads for slow­down’

- Wil­liam Schomberg and An­drew MacAskill Lon­don

BRI­TAIN’S econ­omy will grow more slowly in the short term if the coun­try fails to se­cure a fu­ture trad­ing deal with the EU af­ter Brexit, Bank of England Gover­nor Mark Car­ney said yesterday.

Asked in an in­ter­view with ITV tele­vi­sion if Bri­tain’s econ­omy would take a hit if there is no Brexit deal. Car­ney 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 re­ori­en­tate and dur­ing that pe­riod of time it will weigh on growth.”

Car­ney said Bri­tish busi­ness in­vest­ment should be boom­ing now, given the strength of the world econ­omy, but that it was just grow­ing in­stead. This is be­cause of the un­cer­tainty about the out­come

Ster­ling fell sharply as the cen­tral bank ex­pects ‘very grad­ual’ rate rises ahead.

of the Brexit ne­go­ti­a­tions, he said.

The Bank of England (BoE) on Thurs­day raised in­ter­est rates for the first time since 2007 but ster­ling fell sharply as the cen­tral bank also said it ex­pected only “very grad­ual” rate rises ahead.

Bri­tain’s econ­omy has slowed sharply this year fol­low­ing the 2016 Brexit vote, but the BoE de­cided to raise rates in part be­cause it be­lieves that Brexit will cre­ate more in­fla­tion pres­sure due to lower mi­gra­tion and weaker in­vest­ment.

Car­ney told ITV it was pos­si­ble that in the event of a bad Brexit deal, the BoE would not be able to cut in­ter­est rates in fu­ture, be­cause of that in­fla­tion­ary pres­sure.

“The sce­nario you paint is not the most likely, by any stretch of the imag­i­na­tion, but it is a pos­si­bil­ity,” he said. Car­ney has come un­der pres­sure from some who have been an­gered by his com­ments that Brexit is hav­ing a neg­a­tive im­pact on the econ­omy.

 ?? PHOTO: AP ?? The Gover­nor of the Bank of Eng­land, Mark Car­ney, says Bri­tish busi­ness in­vest­ment should be boom­ing now, given the strength of the world econ­omy and other fac­tors.
PHOTO: AP The Gover­nor of the Bank of Eng­land, Mark Car­ney, says Bri­tish busi­ness in­vest­ment should be boom­ing now, given the strength of the world econ­omy and other fac­tors.

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