01 Feb

Bank of England: Brexit poses risk to economic stability

Mark Carney, the governor of the Bank of England, warns that a British vote to leave the European Union will add a "risk premium" to Britain in an increasingly "febrile" global economy

Britain's economic stability will be put at risk if it votes to leave the European Union, the Governor of the Bank of England has suggested.

Mark Carney said that a vote to leave the European Union could add a "risk premium" to Britain because of the size of its deficit.

He said that Britain will not be able to "rely on the kindness of strangers" in an increasingly "febrile and volatile" economic climate.

He made the comments during an appearance before MPs on the Treasury select committee.

He was asked about whether Britain's current account deficit, the difference between the amount Britain imports and exports, will pose more of a risk to the economy if Britain leaves the European Union.

He told MPs: "First, the general global environment has become much more febrile, much more volatile.

"Relying on the kindness of strangers is not optimal in that type of environment, and that’s what is the case when you’re running a 4-4.5 per cent current account deficit.

"And secondly, the possibility of a risk premium being attached to UK assets because of certain developments exists. And that plays into the riskiness of the situation."

Read The Telegraph's article here.


Posted in General by Anonymous

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