Gloomy Carney says Britain’s falling behind world’s other big economies
MARK Carney last night warned that the Brexit vote has already sent the Uk tumbling down the global economic league table.
In a doom-laden speech in Washington DC, the Bank of England governor said Britain would expand more slowly than other leading Group of Seven nations until the middle of next year.
He said this was only the third time in three decades that the Uk has fared so badly compared with the rest of the G7 – a group that includes the US, Canada, Japan, Germany, France and Italy.
‘There remain considerable risks to the Uk outlook,’ said Mr Carney, adding that an increase in interest rates ‘is likely to be appropriate over the coming months’ to bring inflation back under control.
He said Uk growth ‘looks set to remain weaker than the G7 average until mid2018’. He went on: ‘The Uk has experienced underperformance only twice in the past three decades: once in the depths of the financial crisis and once following the collapse of the Lawson Boom of the late 1980s.’
Although the intention of Brexit ‘is not to turn inwards but rather to increase openness over time’ there was likely to be short-term pain, he added.
‘Any reduction in openness with the EU is unlikely to be immediately compensated by new ties of a similar magnitude with other trade partners,’ he said.
‘And even if new agreements with other partners could be struck instantaneously, the reorientation of business relationships will take some time.’
Before the referendum, the governor warned a vote to leave could tip Britain into recession and send unemployment soaring. Brexit campaigner John Longworth, the former head of the British Chambers of Commerce, said yesterday: ‘This is Project Fear all over again.
‘Mark Carney is right to be gloomy about our post-Brexit prospects if we continue to follow the prescription of the Treasury, the CBI and the Bank of England.
‘ If however we adopt the positive economy advocated by Boris Johnson and James Dyson, Britain’s economy will boom.’
Since the referendum the economy has grown and unemployment has fallen to a 42-year low of 4.3 per cent.