Don’t punish City, Carney warns EU

MARK Carney has warned Brussels against trying to punish the City during Brexit talks.

The Bank of England Governor’s comments came as British imports from the EU hit a record high – and a leading German business group called for a bold free trade deal.

Mr Carney was a key player in the Project Fear campaign against a Leave vote as the referendum loomed. But he now claims Brexit poses a bigger risk to the stability of the EU than to the UK.

Yesterday he stepped up the rhetoric, saying London’s financial dominance delivered enormous benefits to the Continent and efforts to cut it off would imperil the recovery.

Speaking at Reuters in Canary Wharf, Mr Carney announced the Bank was writing to ask major UK financial services firms how they were preparing for Brexit.

There is concern in the City about French and German plans to make it more difficult for London-based banks to do business with the EU. Mr Carney said a good deal with

the bloc, where money remained able to flow freely, would ensure growth and prosperity. But he feared a vindictive approach would ultimately hurt everyone.

London, Mr Carney said, was ‘Europe’s investment banker’ and UK banking was a ‘global public good.’ In an endorsement of Theresa May’s Brexit strategy, Mr Carney said Britain and the EU were ‘ideally positioned’ for a comprehensive free trade deal.

The case for a trade deal was bolstered by official figures showing imports from the EU had jumped £2.5billion on the previous February to £21.9billion. UK exports to the bloc hit a three-and-a-half year high of £13.2billion.

The influential BVMW group, which represents 270,000 German small businesses, also called for negotiations to be guided by ‘guided by economic sense and not by political ideologues’.