Monday 17 June 2019

Bank of England's Mark Carney says UK would suffer hit without Brexit deal

  • We can reach a Brexit deal parliament can support - May
  • Theresa May has no plans to resign this summer
Mark Carney. Photo: Reuters
Mark Carney. Photo: Reuters Business Desk Business Desk

Bank of England Governor Mark Carney said there would be a hit to Britain's economy in the short-term if the country leaves the European Union next month without a deal to smooth its transition.

"Certainly in the short term, there will be a hit to incomes," Carney said, answering questions after a speech at a Financial Times event. "You have got to recognise this could go quite badly. We are 45 days before the possibility of it."

Earlier, sterling fell against the dollar on Tuesday to a new three-week low, as doubts grow about whether Prime Minister Theresa May can convince the European Union to accept changes to her Brexit divorce deal.

Time is running out for May to get the EU to amend the Brexit deal, and then get MPs to back the agreement, before Britain is scheduled to leave the EU on March 29.

That has heightened fears among financial investors of a no-deal and disorderly Brexit even if the majority of British lawmakers want to avoid one, reversing a recent recovery in sterling.

Today, Theresa May said she wanted member from all parties to back the Brexit deal she is aiming to strike, citing the need to pass further legislation to prepare for Britain's exit from the European Union.

Rejection of Theresa May’s EU deal has added to the climate of uncertainty. Photo: Reuters
Rejection of Theresa May’s EU deal has added to the climate of uncertainty. Photo: Reuters

"It is actually, I think, in the interests of this parliament, and in the interests of taking legislation through, that we see a strong vote from across the whole house," May told parliament.

She said she believed she could reach a Brexit deal that parliament could support, allowing Britain to leave the European Union on March 29.

In a statement to parliament to update lawmakers on her negotiations with the EU to secure changes to the Brexit deal, May said again she did not see a customs union as proposed by the opposition Labour Party as the way to secure agreement.

"The talks are at a crucial stage and we now all need to hold our nerve to get the changes this House requires and deliver Brexit on time," she said.

"By getting the changes we need to the backstop; by protecting and enhancing workers' rights and environmental protections and by enhancing the role of parliament in the next phase of negotiations, I believe we can reach a deal that this House can support."

May's political spokesman denied reports that the British leader was ready to step aside after Brexit.

The Sun newspaper reported that May was preparing to resign in the summer to have influence over who succeeds her.


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