Whatever might be said about the Governor of the Bank of England, it’s hard to fault his persistence. Mark Carney has made a habit of wading into the debate surrounding the EU referendum. And based on his appearance in front of the Lords Economic Affairs Committee this afternoon, he isn’t planning on stopping any time soon. Carney repeated the MPC’s warnings about the ‘threats’ from the forthcoming referendum being ‘the most significant near-term domestic risk to financial stability’. He also suggested that the effects of the vote on 23rd June might be materialising already:
He spoke carefully and was clearly mindful of criticism he has faced before for appearing to intervene in the EU referendum, telling the committee that we ‘will comment with respect to issues affecting financial and monetary stability’:
As well as defending past interventions in the EU debate, Carney also backed up the Treasury following the publication of their figures yesterday. George Osborne’s report provoked widespread criticism for its apparent attempt to predict the impact of Brexit on the UK economy in 2030, but the Canadian governor said it was important not to conflate an analysis such as this with an economic forecast, adding that the ‘framework’ behind it was ‘a sound analytic process’:
One interesting takeaway point from the hearing was Carney telling the committee that ‘whatever the outcome of the referendum, the MPC would use its tools to achieve its inflation remit and more broadly the bank’s policy committees would work in concert as one bank to promote financial stability’. Carney went on to say that we should ‘make no mistake, this is a resilient economy’.
This is about as much re-assurance as is likely to emerge from a figure like Carney that there could be life after Brexit. It’s hardly surprising to know that a major organisation such as the Bank of England is preparing to deal with the outcome of a possible vote to leave the EU. Mark Carney’s hearing gave good news for those worried by Project Fear then. Yes, Brexit could unsettle the UK economy. It might also be a risk to financial stability. But Carney seemed clear – at least briefly – that the Bank of England is braced for whatever outcome the referendum throws at it.